Refer to Figure 12.1. Suppose the emissions tax is $95/ton/month. Find the efficient level of emissions for the firm. Explain why the firm would not reduce its emissions to 1 ton/month.

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Emissions (tons/month) 10 300 250 200 $ 150 100 50 43312S000 9 8 7 6 5 MAC a Marginal Abatement Cost 0 15 30 50 70 95 120 150 185 230 290 b 4 6 Emissions (tons/month) 8 Total Abatement Cost 0 15 45 95 165 260 375 525 710 940 1,230 10 Total Tax Bill at $120/Ton 1,200 1,080 960 840 720 600 480 360 240 120 0 Total Costs 1,200 1,095 1,005 935 885 860 855 885 950 1,060 1,230