Question

Suppose the united states has two​ utilities, commonwealth utilities and consolidated electric. both produce 20 million tons of sulfur dioxide pollution per year.​ however, the marginal cost of reducing a ton of pollution for commonwealth utilities is ​$325 per ton and the marginal cost of reducing a ton of pollution for consolidated electric is ​$375 per ton. the​ government's goal is to cut sulfur dioxide pollution in half​ (by 20 million tons per​ year). if the government issues 10 million tradable pollution permits to each​ utility, what will be the cost of eliminating half of the pollution to​ society

Answer 1

The cost will result in 154$ per ton