Two firms, A and B, each currently dump 100 tons of pollutants into the air. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. It costs Firm A $30 for each ton of pollution that it eliminates, and it costs Firm B $50 for each ton of pollution that it eliminates. The government gives each firm 80 pollution permits. Enter answers as whole numbers, no decimals. A What is the total.cost (total for both firms) of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? S B. What is the total.cost (total for both firms) of reducing pollution if the firms are allowed to buy and sell permits from each other? (Assume that the market price for tradeable pollution permits is $40 each) $
Two firms, A and B, each currently dump 100 tons of pollutants into the air. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. It costs Firm A $30 for each ton of pollution that it eliminates, and it costs Firm B $50 for each ton of pollution that it eliminates. The government gives each firm 80 pollution permits. Enter answers as whole numbers, no decimals. A What is the total.cost (total for both firms) of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? S B. What is the total.cost (total for both firms) of reducing pollution if the firms are allowed to buy and sell permits from each other? (Assume that the market price for tradeable pollution permits is $40 each) $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Economic
Transcribed Image Text:Two firms, A and B, each currently dump 100 tons of pollutants into the air. The government has decided to
reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air,
It costs Firm A $30 for each ton of pollution that it eliminates, and it costs Firm B $50 for each ton of pollution
that it eliminates. The government gives each firm 80 pollution permits.
Enter answers as whole numbers, no decimals.
A. What is the total.cost (total for both firms) of reducing pollution if firms are not allowed to buy and sell
pollution permits from each other? S
B. What is the total.cost (total for both firms) of reducing pollution if the firms are allowed to buy and sell permits
from each other? (Assume that the market price for tradeable pollution permits is $40 each.) $
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