The table below gives the marginal abatement costs of three polluting firms in an industry. The...

  

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The table below gives the marginal abatement costs of three polluting firms in an industry. The industry is regulated with an emission tax of $9. Emissions. (tons/week) 10 9 8 7 6 5 4 3 2 1 0 Marginal abatements costs ($/ton) Firm 1 0 ASAHANG 2 5 9 14 20 27 35 44 54 66 Firm 2 0 1 3 5 9 14 20 27 35 44 59 Firm 3 0 1 5689C AWN 10 a. (3 marks) What is the total level of emissions? Show your work. b. (2 marks) What are firm I's total compliance costs? Show your work. c. (2 marks) If instead of an emission tax, the regulator offered subsidy for each unit of abatement, how would your result in (a) change? Explain how the firm would respond to the abatement subsidy. d. (2 marks) In part (c), what are firm I's total compliance costs? Show your work. e. (2) Is there any major drawback of abatement subsidies compared to emission taxes? The table below gives the marginal abatement costs of three polluting firms in an industry. The industry is regulated with an emission tax of $9. Emissions. (tons/week) 10 9 8 7 6 5 4 3 2 1 0 Marginal abatements costs ($/ton) Firm 1 0 ASAHANG 2 5 9 14 20 27 35 44 54 66 Firm 2 0 1 3 5 9 14 20 27 35 44 59 Firm 3 0 1 5689C AWN 10 a. (3 marks) What is the total level of emissions? Show your work. b. (2 marks) What are firm I's total compliance costs? Show your work. c. (2 marks) If instead of an emission tax, the regulator offered subsidy for each unit of abatement, how would your result in (a) change? Explain how the firm would respond to the abatement subsidy. d. (2 marks) In part (c), what are firm I's total compliance costs? Show your work. e. (2) Is there any major drawback of abatement subsidies compared to emission taxes?

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a What is the total level of emissions Show your work The total level of emissions is calculated by ... View the full answer