Question: Firm 1: MAC_1 = 100 - 2e_1 (where e_1 represents emissions by Firm 1) Firm 2: MAC_2 = 100 - 0.50e_2 (where e_2 represents emissions

Firm 1: MAC_1 = 100 - 2e_1 (where e_1 represents emissions by Firm 1) Firm 2: MAC_2 = 100 - 0.50e_2 (where e_2 represents emissions by Firm 2) We can rewrite these equations to solve for emissions (e) in terms of marginal abatement cost (MAC): e_1 = 50 - MAC_1 / 2 (for Firm 1) e_2 = 200 - 2 * MAC_2 (for Firm 2)

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