A town's residents are exposed to pollution emitted by three steel-producing plants (call them plants 1,...

 

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A town's residents are exposed to pollution emitted by three steel-producing plants (call them plants 1, 2 and 3). The MAC functions of the plants are as follows. Emissions are in thousands of tonnes per year: MAC1= 20 - 2E1 MAC2 = 30 - E2 MAC3 = 10-0.5E3 Marginal damage (MD) has been estimated to equal $5 at the socially efficient level of emissions. 1. Graph the 3 MAC curves in the same diagram. Label each curve. 2. What are total uncontrolled emissions? (Add up uncontrolled emissions for each plant) 3. For social efficiency and cost-effectiveness, how many tonnes of emissions should be abated by each plant per year? Compute and identify in your graph the areas of TAC for each plant A town's residents are exposed to pollution emitted by three steel-producing plants (call them plants 1, 2 and 3). The MAC functions of the plants are as follows. Emissions are in thousands of tonnes per year: MAC1= 20 - 2E1 MAC2 = 30 - E2 MAC3 = 10-0.5E3 Marginal damage (MD) has been estimated to equal $5 at the socially efficient level of emissions. 1. Graph the 3 MAC curves in the same diagram. Label each curve. 2. What are total uncontrolled emissions? (Add up uncontrolled emissions for each plant) 3. For social efficiency and cost-effectiveness, how many tonnes of emissions should be abated by each plant per year? Compute and identify in your graph the areas of TAC for each plant

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1 Graph of MAC curves Graph omitted for brevity It shows MAC1 202E1 MAC2 30E2 ... View the full answer