You are tasked with regulating air pollution in your state, and scientists have told you that you need to reduce the quantity of air pollution emitted each year from the current level of 7 units to 3 units. Your research team estimates that the marginal cost of abatement for power plants is given by the function

Q15 You are tasked with regulating air pollution in your state, and scientists have told you that you need to reduce the quantity of air pollution emitted each year from the current level of 7 units to 3 units. Your research team estimates that the marginal cost of abatement for power plants is given by the function MCAplants = Q (7) 7 and the marginal cost of abatement for cars is given by MCACQH =.30 + .562 where Q is the amount of pollution emitted. 1. What is the total cost of reaching the pollution target if only power plants reduce their emissions? What is the total cost of reaching the target if only cars reduce their emissions? 2. If the state wanted achieve the emissions target at the lowest combined cost to drivers and power plants, how much would each sector emit? (hint: plot both MCA curves on the same horizontal axis but in opposing directions.) 3. A capandtrade system (in theory) achieves the least costly way of reducing a given amount of pollution. Explain why using this market as an example (hint: describe opportunities for trade outside of the equilibrium). 4. What might be some problems with a capandtrade system for this market in the real world