Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 4PA

Subpart (a):

To determine

Measuringrevenues, costs and profits.

Subpart (b):

To determine

Measuringrevenues, costs and profits.

Subpart (c):

To determine

Measuringrevenues, costs and profits.

Subpart (d):

To determine

Measuringrevenues, costs and profits.

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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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