Question: Exercise 3 {16 points) Two rms are ordered by the federal government to reduce their pollution levels. Firm A'a marginal costs associated with pollution reduction

Exercise 3 {16 points) Two rms are ordered by the federal government to reduce their pollution levels. Firm A'a marginal costs associated with pollution reduction is M C = 125+3Q. Firm B's marginal costs associated with pollution reduction is MC = 9Q. The marginal benet of pollution roduetion is M B = 225 w 4Q. (a) What is the socially optimal level of each rm'a pollution reduction

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