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Suppose that there are two firms in the industry producing a product. Assume that the firms behave like perfectly competitive firms (i.e. the demand equals the supply of the product). The marginal cost of abatement (MAC) curves for each of the two firms are MAC1=300E1 and MAC2=3003E2, where E1 and E2 respectively represent the emissions of a pollutant from each firm. The emissions cause environmental damages which are described by the marginal damage curve, MD= 90+E, where E is the aggregate quantity of emissions such that E=E1+E2. The units for MACs and MDs are $/ ton while the units for emissions are tons. a) (4) How many emissions should each firm produce in order to minimize its total abatement costs (TAC)? Explain and show graphically. b) (6) Find the socially efficient (SE) level of emissions and illustrate on a graph. You will need to find the aggregate MAC curve. c) (6) suppose that the government decides to regulate the industry such that the SE level of emissions is achieved. A uniform emissions standard (quantity ceiling on emissions) is imposed upon each firm. A uniform emissions standard means that each firm gets the same emissions standard. What emissions standard should be imposed on each firm? Illustrate on a graph. Calculate the total abatement costs (TAC) for each firm and for the industry and label on your graph. Find the MAC for the last unit abated by each firm