Suppose there are 2 sources of emissions with two MAC as follows: MAC1 = -4W + 48 MAC2 = -10W + 120 If no sources make any effort to control emissions, how much effluent is emitted into the environment? What is the abatement cost if source 1 reduces emissions by 1 ton and source 2 reduces emissions by 10 tons? Now assume that we want to reduce overall emissions to half of the uncontrolled level, which equiproportionate cutbacks would do? What is the total costs of this solution?
Added by K59 D.
Step 1
If no sources make any effort to control emissions, the amount of effluent emitted into the environment is the maximum amount that each source can emit. This is found by setting the MAC equations equal to zero and solving for W (which represents the amount of Show more…
Show all steps
Your feedback will help us improve your experience
Richelle Chappell and 85 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Suppose three production facilities are polluting a river. Each emits 20 units of pollution. Their marginal costs for reducing pollution are, respectively, MC1 = $2, MC2 = $3, and MC3 = $5.a.) How much reduction should be assigned to each rm, if the objective is to cut emissions in half in the most cost-ecient way? What would be the totalcost of reducing emissions? b.) What would be to total cost of forcing each m to reduce emissions by one half?
Andrew D.
Two large factories are operating in the same area, causing serious emissions (1000 units and 400 units). The authorities would like to reduce the total emissions to 500 units using a Transferable Discharge Permit Program. The initial emission permits for each factory are 250. And 1 permit represents 1 unit of emission that the factory is allowed to emit. The total abatement cost curves of the factories are: TAC1 = q1^2 / 4 TAC2 = q2^2 / 2 (where q means the amount of removed pollution) a. How many units of emission of each factory after the trade and what is the price for each permit? b. How many units of permits will be traded? c. What will be the benefit of each factory after trade
Oluwadamilola A.
The cost of controlling emissions at a firm is given by $$C(q)=4,000+100 q^{2}$$ where $q$ is the reduction in emissions (in pounds of pollutant per day) and $C$ is the daily cost to the firm (in dollars) of this reduction. Government clean-air subsidies amount to $$\$ 500$$ per pound of pollutant removed. How many pounds of pollutant should the firm remove each day in order to minimize $n e t$ cost (cost minus subsidy)?
Further Applications of the Derivative
Applications of Maxima and Minima
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD