Two firms - A & B - -- are ordered by the federal government to reduce their pollutionlevels. Firm A's marginal cost of pollution reduction is MCA = 150 + 3QA and Firm B'smarginal cost of pollution reduction is MCB = 9QB. The marginal benefit of pollutionreduction is MB = 250 4QT, where QT is the total amount of reduction. If thegovernment required Firm A and Firm B to reduce pollution by the same amount, what is―Firm A's MC of this policy?Two firms - - A & B - are ordered by the federal government to reduce their pollutionlevels. Firm A's marginal cost of pollution reduction is MCA = 150 + 3QA and Firm B'smarginal cost of pollution reduction is MCB = 9QB. The marginal benefit of pollutionreduction is MB = 250 - 4QT, where QT is the total amount of reduction. If thegovernment required Firm A and Firm B to reduce pollution by the same amount, what isFirm B's MC of this policy?

The problem asks to find the marginal cost of pollution reduction for Firm A and Firm B, given that…

Answered: Two firms - A & B - -- are ordered by…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 4PA

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Economists sometimes shock noneconomists by stating that they do not favor the complete elimination of pollution. Explain the rationale for this position.
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Figure 8.1 shows the marginal pollution control costs per ton for a firm that would pollute at Qmax without any regulation. Suppose a pollution tax of T1 per ton were implemented, with the firm reducing pollution to Qtax. What area(s) would represent(s) the firm’s pollution reduction costs, not considering the taxes it pays? Group of answer choices A+B A+B+C B+C D C
Figure 8.1 shows the marginal pollution control costs per ton for a firm that would pollute at Qmax without any regulation. Suppose a pollution tax of T1 per ton were implemented but the firm did not reduce its pollution from Qmax. What area(s) would represent(s) the tax paid by the firm? Group of answer choices B C+D A+B+C+D B+C B+C+D
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7. In a market for dry cleaning, the inverse market demand function is given byP= 100- 0, and the (private) marginal cost of producbion for the aggrega- tion of all dry-cleaning firms is given by MC = 10 + Q. Finally, the pollution generated by the dry cleaning process creates external damages given by the mar- ginal external cost.curve MEC0, a Calculate the output and price of dry cleaning if it is produced under competitive conditions without regulation. b. Determine the socially efficient price and output of dry cleaning c Determine the tax that would result in a competi- live market pmducing the socially efficent output. d. Caleulate th oulput and price of dry clearing if it sproduced under monopoliklieconditions withrt regulation e Delermine the tax that would result in a moopols- ie market produring the soclally eficient outpuL
The figure below shows the marginal benefit (demand) of polluting for two firms: Alpha and Beta. Before the introduction of a pollution tax, pollution is free, that is, MC = $0 per ton of emissions. Marginal Benefit (MB) to Firm Tax = $100 0 MB BETA MBALPHA 25 50 75 100 Emissions (tons) The government decides to impose a tax on pollution of $100 per ton of emissions. That is, the per-unit the tax is the marginal cost of polluting. Which of the follow are true? (Select all that are true.) a. As a result of the tax, the total emissions will decrease by 50 units b. The tax was intended to decrease production by 50 units for each firm. c. As a result of the tax, both firms will decrease emissions by the same amount d. After the tax is imposed, Firm Beta will emit 50 tons more pollution than Firm Alpha e. Before the tax is imposed, Firm Beta emitted more pollution than Firm Alpha f. As a result of the tax, total emissions from the two firms will be cut in half g. The amount of tax collected…
The figure shows the production of fertiliser by a perfectly competitive profit-maximising firm. Production of the good leads to pollution of the environment. This pollution is an external cost to the firm. MC represents marginal cost as faced by the firm; I and II represent possible positions of the marginal social cost curve. Suppose that the government imposes a 'pollution tax' on the firm at a constant Costs and revenue rate per unit of output. Assuming that this firm is the only polluter in the industry, what effect will the tax have on the market price? - MC Move to £1 II Move to £2 Remain at £3 Move to £4 Move to £5 Q1 Quantity of fertiliser Q2. Q3
the policy mentioned in the article was a carbon tax placed on high-emission vehicles. does the per-unit tax size of P3-P1 on buyers, internalise the externality?
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