Question: Suppose that the Marginal Abatement Cost function and the Marginal Damage function for an industry are given as follows: MAC=48-0.4e MD=0.35e For simplicity here,

Suppose that the Marginal Abatement Cost function and the Marginal Damage function

Suppose that the Marginal Abatement Cost function and the Marginal Damage function for an industry are given as follows: MAC=48-0.4e MD=0.35e For simplicity here, we are assuming that they are linear. a. Graph the MAC and MD curves for this industry. Make sure you are marking out any and all relevant axis intercepts. b. If this industry is completely unregulated, what is the level of emissions? How did you get this number? c. What is the threshold level number? emissions of this industry? How did you get this d. What is the socially efficient level of emissions? How did you find this number?

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