For a particular industry the aggregate marginal damage cost (MD) equation is MD=200+ E and aggregate...

 

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For a particular industry the aggregate marginal damage cost (MD) equation is MD=200+ E and aggregate marginal abatement cost (MAC) equation is MAC = 900 -0.75E 1. Carefully graph the MAC and MD. What is the socially efficient level of emissions for this industry? 2. What is the socially efficient level of abatement for this industry? 3. What is the total damage cost at the socially efficient level of emissions for this industry? 4. What is the total abatement cost at the socially efficient level of emissions? 5. What is the total social cost at the socially efficient level of emissions? 6. Note that the MD equation has a vertical intercept of 200, which differs from the examples used in the lecture. What economic interpretation would you give for this form of the MD function? In particular, what does the vertical intercept tell you about this type of emission? For a particular industry the aggregate marginal damage cost (MD) equation is MD=200+ E and aggregate marginal abatement cost (MAC) equation is MAC = 900 -0.75E 1. Carefully graph the MAC and MD. What is the socially efficient level of emissions for this industry? 2. What is the socially efficient level of abatement for this industry? 3. What is the total damage cost at the socially efficient level of emissions for this industry? 4. What is the total abatement cost at the socially efficient level of emissions? 5. What is the total social cost at the socially efficient level of emissions? 6. Note that the MD equation has a vertical intercept of 200, which differs from the examples used in the lecture. What economic interpretation would you give for this form of the MD function? In particular, what does the vertical intercept tell you about this type of emission?

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1 To graph the MAC and MD we plot them on the same graph with E on the xaxis and MD and MAC on the yaxis import matplotlibpyplot as plt import numpy a... View the full answer