There are ten polluting firms, Firm1,. . . ,Firm10. Each firm emits 100 pounds of pollution prior to any regulations (so there a
re 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?
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?
1 answer:
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:
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Answer:
attached is the diagram
Explanation:
Each extra worker produces an extra unit of output, is said to be the marginal production of an extra worker employed
marginal production :
change in total production / change in labor = ΔTp / ΔL
Average production = Tp / L
Tp = total production , L = number of labor
To draw the Total product of labor , average product labor and marginal product labor curves starting from zero labor
0 worker : Total product = 0, average product labor = 0 , marginal = 0
1 worker : Total product = 1, average product = 1 , marginal = 0
2 worker : Total product = 2, average product = 1, marginal = 1
3 workers: total product = 3 average product = 1, marginal = 1
4 workers: Total product = 4, average product = 1, marginal = 1
5 workers : Total product = 5 average product = 1, marginal = 1
6 workers : total product = 6 average product = 1 , marginal = 1
7 workers : total product = 7 , average product = 0.85, marginal = 0
8 workers : total product = 8, average product = 0.75 marginal = 0
