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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- wo firms, A and B, each currently dump 50 tonnes of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each tonne of pollution dumped into the river. It costs Firm A $100 for each tonne of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each tonne of pollution that it eliminates before it reaches the river. The government gives each firm 20 pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution if the firms are NOT allowed to buy and sell pollution permits from each other, and what is the total cost of reducing pollution if the firms ARE allowed to buy and sell permits from each other? A. $4500; $2500 B. $3000; $1500 C. $4500; $3500 D. $4500; $4000Scenario 2. Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. The government gives each firm 20 pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. Refer to Scenario 2. What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? if firms are not allowed to buy and sell pollution permits from each other?There are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits. Firm Initial Pollution Level Cost reducing pollution by 1 unit A 70 Units $20 B 80 Units $25 C 50 Units $10 Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation?
- There are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits. Firm Initial Pollution Level Cost reducing pollution by 1 unit A 70 Units $20 B 80 Units $25 C 50 Units $10 Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? How much higher would the cost of pollution reduction be if the permits could not be traded?There are three industrial firms in a town Firm Initial Pollution Level Cost of Reducing Pollution by 1 Unit A 30 units $20 40 units 20 units B с $30 $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. 1. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? 2. How much higher would the costs of pollution reduction be if the permits could not be traded?17. Two firms, A and B, each currently dump 50 tonnes of chemicals into the local river. From now on both firms will require a pollution permit for each tonne of pollution dumped. The government gives each firm 20 tonnes' worth of pollution permits, which it can either use or sell to the other firm. It costs Firm A $100 for each tonne of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each tonne of pollution that it eliminates before it reaches the river. After the two firms buy or sell pollution permits from each other, what would we expect that Firm A and Firm B will dump? a Firm A will dump 10 fewer tonnes of pollution into the river, and Firm B will dump 50 fewer tonnes of pollution into the tiver. b. Firm A will dump 50 fewer tonnes of pollution into the iver, and Firm B will dump 10 fewer tonnes of pollution into the river. c. Firm A will dump 50 fewer tonnes of pollution into the river, and Firm B will dump 10 more tonnes of pollution into…
- There are three industrial firms in Happy Valley.The government wants to reduce pollution to 60 units, so it gives each firm 20 tradablepollution permits.a. Who sells permits and how many do they sell? Who buys permits and how many dothey buy? Briefly explain why the sellers arid buyers are each willing to do so. What isthe total cost of pollution reduction in this situation?b. How much higher would the costs of pollution reduction be if the permits could notbe tradedThe 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…There are three industrial firms in Happy Valley.FirmInitial PollutionLevelCost of ReducingPollution by 1 UnitA 30 units $20B 40 units $30C 20 units $10The government wants to reduce pollution to 60 units,so it gives each firm 20 tradable pollution permits.a. Who sells permits and how many do they sell?Who buys permits and how many do they buy?Briefly explain why the sellers and buyers are eachwilling to do so. What is the total cost of pollutionreduction in this situation?b. How much higher would the costs of pollutionreduction be if the permits could not be traded?
- The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67. Firm Unit to be eliminated A B C D First unit 54 57 54 62 Second unit 67 68 66 73 Third unit 82 86 82 91 Fourth unit 107 108 107 111 Refer to Table 5. If the government charged a fee of $84 per unit of pollution, how many units of pollution would the firms eliminate altogether?firms matter for efficiency? Explain. 9. There are three industrial firms in Happy Valley. Cost of Reducing Pollution by 1 Unit Initial Pollution Firm Level A 30 units $20 40 units $30 C 20 units $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. a. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? b. How much higher would the costs of pollution reduction be if the permits could not be traded? Answersfirms matter for efficiency? Explain. 9. There are three industrial firms in Happy Valley. Initial Pollution Cost of Reducing Firm Level Pollution by 1 Unit A 30 units $20 В 40 units $30 C 20 units $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. a. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? b. How much higher would the costs of pollution reduction be if the permits could not be traded? Answers