Two firms can control emissions at the following marginal costs: MC;= $300q1, MC2=$100q2 where q1 and 92 are, respectively, the amount of emissions reduced by the first and second firms. Assume that with no control at all, each firm would be emitting 30 units of emissions or a total of 60 units for both firms. We want to find the cost-effective allocation of control responsibility if a total reduction of 28 units of emissions is necessary. In a cost-effective allocation of emissions reduction, the marginal control costs should be equal. So $ 91 =s 92. Furthermore, the total reduction is 28 units, so q1+ 92" . Solving these two equations, we find q1= and 92- Hint: Type integers.

Two firms can control emissions at the following marginal costs: MC;= $300q1, MC2=$100q2 where q1 and 92 are, respectively, the amount of emissions reduced by the first and second firms. Assume that with no control at all, each firm would be emitting 30 units of emissions or a total of 60 units for both firms. We want to find the cost-effective allocation of control responsibility if a total reduction of 28 units of emissions is necessary. In a cost-effective allocation of emissions reduction, the marginal control costs should be equal. So $ 91 =s 92. Furthermore, the total reduction is 28 units, so q1+ 92" . Solving these two equations, we find q1= and 92- Hint: Type integers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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