Suppose two firms owned by xxx Corporation and zzz Industries are currently emitting 8,000 tons of pollution
Fantastic news! We've Found the answer you've been seeking!
Question:
- Suppose two firms owned by xxx Corporation and zzz Industries are currently emitting 8,000 tons of pollution each. Abatement costs for xxx are MCT = 0.03QT and abatement costs for zzz are MCK = 0.02QK.
a.) Consider a pollution standard requiring each firm to reduce pollution by 5,000 tons. Calculate pollution reduction costs for each rm. (5 pts)
b.) What per unit tax would accomplish the same pollution reduction as the pollution standard in part (a)? Calculate pollution reduction costs for each
firm. (5 pts)
c.) Calculate the tax paid by each firm. (4 pts)
Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
Posted Date: