Consider a situation with two firms that have marginal abatement cost functions The marginal damage function is
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Consider a situation with two firms that have marginal abatement cost functions 
The marginal damage function is again equal to D'(E)=d.E. Assume the regulator applies Montero’s mechanism. Determine the optimal allocation and the optimal refunding shares β1 and β2
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The question is asking us to determine the optimal allocation of emissions and the optimal refunding shares for two firms under Monteros mechanism giv...View the full answer
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Related Book For 
A Course In Environmental Economics
ISBN: 9781316866818
1st Edition
Authors: Daniel J Phaneuf, Till Requate
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