A steel firm creates water pollution for a downstream fishery. The price and cost functions for steel

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A steel firm creates water pollution for a downstream fishery. The price and cost functions for steel and fish are as follows:

(a) How much steel (s) and pollution (x) will the steel plant produce if operated independently? (It will maximise profit)

(b) How much fish (0 will the fishery produce if operated independently? (Again, it wants to maximise profit)

(c) How much steel (s), pollution (x) and fish (0 will the steel and fish plants produce if they are merged and act to maximize joint profit? (Maximise joint profit)

Related Book For answer-question

The Economics of the Environment

ISBN: 9780321321664

1st edition

Authors: Peter Berck, Gloria Helfand

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Posted Date: Jun 18, 2019 01:03 AM

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A steel firm creates water pollution for a downstream fishery. The price and cost functions for steel

Question:

Price of steel Cost function for steel Csteel(s,x) Price of fish Cost function for fish Cfish(f,x) 30 6s +3s² - 20x + 2x² 50 20f+5f² + 14x + x² Price of steel Cost function for steel Csteel(s,x) Price of fish Cost function for fish Cfish(f,x) 30 6s +3s² - 20x + 2x² 50 20f+5f² + 14x + x²

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Formulae used a When steel plant is operated independently it should produc... View the full answer

The Economics of the Environment

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