Question: Hello, I would like some help to solve this question please. Thank you. 3. (40 pts) Three factories, namely A, B and C, emit local

Hello, I would like some help to solve this question please. Thank you.

Hello, I would like some help to solve this question please. Thank

3. (40 pts) Three factories, namely A, B and C, emit local air pollutants near a populated area. Their emissions cause damages in the area that are described by the damage function MD = 0.75E. The abatement cost functions for the three factories are given by MACA = 360 - 12EA, MACB = 240 - 4EB and MACc = 120 -6Ec, respectively. (a) Derive algebraically and graphically the aggregate marginal abatement cost func- tion. Indicate intercepts and kink point(s). (b) Find the socially efficient level of emissions in the atmosphere. What is the socially efficient level of abatement? How many units of emissions should each firm emit so that the efficient level of emission will be achieved? (c) If the government sets the pollution level at the socially efficient level of emissions, calculate the total abatement cost per firm. (d) Calculate the net social benefits and the benefit-cost ratio at the socially efficient level of emissions

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!