Question: Suppose there are two polluting firms, each polluting 12 tons of sulfur dioxide (SO2). SO2 emissions create acid rain which harms species in lakes and

Suppose there are two polluting firms, each polluting 12 tons of

Suppose there are two polluting firms, each polluting 12 tons of sulfur dioxide (SO2). SO2 emissions create acid rain which harms species in lakes and rivers. The government imposes a per unit emission tax of $ Each firm will be required to pay this charge for each ton of So, it emits. The data below represents the marginal abatement costs for the two firms. Answer the questions that are provided on the answer sheet. Tons of SO2 abated Firm 1 Marginal Abatement Costs ( MAC) $10 Total Abatement Costs Tons of SO2 abated Firm 2 Marginal Abatement Costs (MAC) Total Abatement Costs S10 $50 105 175 100 220 360 450 550 660 780 940 1240 1640 2260 3260 620 1000 A. How many tons of SO2 will Firm 1 abate? How many tons of SO2 will Firm 2 abate? What are the total costs of abatement incurred by Firm 1? What are the total costs of abatement incurred by Firm 2? How many tons of So, will Firm 1 emit after the charge? How many tons of So, will Firm 2 emit after the charge? G. In total, how much will Firm 1 pay in emission taxes?** H. In total, how much will Firm 2 pay in emission taxes?** **HINT: tax rate x units of pollution remaining for the respective firm Suppose there are two polluting firms, each polluting 12 tons of sulfur dioxide (SO2). SO2 emissions create acid rain which harms species in lakes and rivers. The government imposes a per unit emission tax of $ Each firm will be required to pay this charge for each ton of So, it emits. The data below represents the marginal abatement costs for the two firms. Answer the questions that are provided on the answer sheet. Tons of SO2 abated Firm 1 Marginal Abatement Costs ( MAC) $10 Total Abatement Costs Tons of SO2 abated Firm 2 Marginal Abatement Costs (MAC) Total Abatement Costs S10 $50 105 175 100 220 360 450 550 660 780 940 1240 1640 2260 3260 620 1000 A. How many tons of SO2 will Firm 1 abate? How many tons of SO2 will Firm 2 abate? What are the total costs of abatement incurred by Firm 1? What are the total costs of abatement incurred by Firm 2? How many tons of So, will Firm 1 emit after the charge? How many tons of So, will Firm 2 emit after the charge? G. In total, how much will Firm 1 pay in emission taxes?** H. In total, how much will Firm 2 pay in emission taxes?** **HINT: tax rate x units of pollution remaining for the respective firm

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