The Home Laughlin China Company of West Virginia manufactures Fiesta China in a variety of colors. The factory has a store where
1 answer:
You might be interested in
Answer:
Answer for the question:
There are ten polluting firms, Firm1,. . . ,Firm10. Each firm emits 100 pounds of pollution prior to any regulations (so there are currently 1,000 pounds being emitted). Each firm has constant marginal abatement costs, but the costs vary across firms. Conveniently, the firms’ names indicate their marginal abatement costs. Firm1’s marginal abatement costs are constant at $1 per pound, Firm2’s marginal abatement costs are constant at $2 per pound,. . . , and Firm10’s marginal abatement costs are $10 per pound.
a. Suppose the regulator wants to achieve a 25% reduction in pollution (250 pounds). What is the cost effective allocation of emis- sions across the ten firms?
b. What are the total abatement costs for society to achieve a 250 pound reduction in emissions?
c. The marginal damage of pollution in this city is given by MD= 4-1/250 X, where X is the total reduction in pollution. What is the optimal level of pollution?
is given in the attachment.
Explanation:
