Question: Solve clearly.. Two plants are covered by a tradable permit system. Plant one has a marginal abatement cost given by MAC1 = 9 - E1

Solve clearly..

Two plants are covered by a tradable permit system. Plant one has a marginal abatement cost given by MAC1 = 9 - E1 and plant two has a marginal abatement cost given by MAC2 = 8 E2, where MAC is measured in dollars/ton and E in tons/hour. If each plant is given permits for 3 tons/hour of pollution and they are allowed to trade, how much will plant 1 spend to comply with the regulation (abatement cost plus cost of buying permits or minus amount received from selling permits)

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