Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Question
Chapter 14, Problem 14.11P
a)
To determine
To know:
b)
To determine
Calculation of marginal and
c)
To determine
To calculate:Calculation of marginal and average cost from total cost.
d)
To determine
To plot:Graphical representation of average cost curve.
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d-f
G please!
4. Consider two polluting firms, with the marginal abatement costs of polluters 1 and 2,
respectively, equal to
MAC₁ = 20-E1
MAC2 = 12-E2
a. What is the unregulated level of pollution for each firm?
b. Assume policymakers have decided to cut the level of pollution in half. The way they
intend to accomplish this goal is to require both firms to cut their pollution in half. What
are the total costs of abatement from the policy? And how are these costs distributed
between the firms?
c. Is this uniform quota on emissions across firms the most cost-effective manner in which
to reduce emissions by 50%?
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