Use this prompt to answer the following questions about tradeable permits. Two firms each currently dump 20 tons of pollution a piece into a local river. The government wants to reduce the amount of pollution in the river so they issue 5 permits to each firm. The cost for firm A to reduce their pollution by 1 ton is $1000 and the cost for firm B to reduce their pollution by 1 ton is $800. When answering the questions below simply enter the number for your answer do not write a full sentence. Question 1 If trade is NOT allowed what will be the cost of reducing pollution will be for firm A, for firm B, and in total. 3 pts
Use this prompt to answer the following questions about tradeable permits. Two firms each currently dump 20 tons of pollution a piece into a local river. The government wants to reduce the amount of pollution in the river so they issue 5 permits to each firm. The cost for firm A to reduce their pollution by 1 ton is $1000 and the cost for firm B to reduce their pollution by 1 ton is $800. When answering the questions below simply enter the number for your answer do not write a full sentence. Question 1 If trade is NOT allowed what will be the cost of reducing pollution will be for firm A, for firm B, and in total. 3 pts
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Use this prompt to answer the following questions about tradeable permits.
Two firms each currently dump 20 tons of pollution a piece into a local river. The government
wants to reduce the amount of pollution in the river so they issue 5 permits to each firm. The
cost for firm A to reduce their pollution by 1 ton is $1000 and the cost for firm B to reduce
their pollution by 1 ton is $800.
When answering the questions below simply enter the number for your answer do not write
a full sentence.
Question 1
If trade is NOT allowed what will be the cost of reducing pollution will be
for firm A,
for firm B, and
in total.
3 pts
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