(a) On your work sheet Graph the two marginal cost lines (on two separate graphs). (b) The traditional approach has been to assign all 200 units of abatement to the power plants, i.e. Qc = 0 and Qp = 200. What is the total cost of abatement under this system? Show your calculations on your work sheet and enter the total cost in the blank below. (c) The planners have hired you to tell them what the cheapest way is for the city to divide the 200 units of abatement between the two sources. What do you tell them? (ie. what are Qc and Qp for the cost-effective solution ?)
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- Suppose MAC functions for two firms, Firm 1 and Firm 2, are MAC₁= 60-2E₁and MAC₂-48-3E2 respectively. (i) Suggest the (socially) cost-effective way to set emission standards for the two firms to reduce their combined level of emissions to 20 units. [Note that we want only 20 units of emissions from the two firms at the end.] (ii) What is the sum of the abatement costs (or total social compliance costs) when emissions are reduced from the two firms to 20 units in the socially cost-effective manner by using emission standards. [This is related to part (i).] (iii) What emission tax rate applied simulataneously to the two firms reduces the combined level of emissions to 20 units from the two firms just as the cost-effective way to set standards? [This question needs to answered based on your answer(s) to part (ii).]Following are the marginal abatement costs of three firms . Suppose each firm is currently emitting 10 tons / week , so the total emissions are 30 tons / week . Suppose we wish to reduce total emissions by 50 % , to 15 tons per week . The following table provides marginal abatement costs for each firm . a ) What is the total cost if each firm cuts total emission by 50 % from their current levels . b ) What is the total cost if the total emissions decrease by 50 % ( to 15 tons per week ) that meets the equi - marginal principle . c ) From the society's point , which method of reducing ( a or b above ) emissions is better ? Provide a reason .Suppose there are two power plants that release sulfur dioxide (SO2) into air at their current production levels. Each firm currently emits 75 tons per year, thus emitting 150 tons total. Local authorities have decided they would like to reduce annual SO2 pollution to 100 tons per year (thus a 50 ton reduction). The power plants have different marginal abatement costs given by the following equations: MAC1 = 3q1 + 5 MAC2 = 2q2 (a) Suppose the local authorities decide to impose a uniform reduction of pollution by both power plants. In order to achieve the 50 unit reduction under this plan, both plants must reduce their emissions (abate pollution) by 25 units each. Find the total cost of abatement under this uniform reduction policy. (b) Find the efficient abatement amount for each power plant if you wanted to achieve the 50 unit reduction at the most cost-efficient way possible (i.e. find the q1 and q2 that achieves the 50 unit reduction in the cheapest way). What is the total cost of…
- Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100-e1 MAC2 = 100-4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions: Firm 2’s unregulated level of emissions: Total unregulated level of emissions: Suppose a regulator has a goal of reducing the total level of emissions from the amount from the amount you answered in [1] to 25 units. The regulator would like to achieve the goal of 25 units of total emissions in a cost-effective way. To do so it issues 25 permits, 10 are given to Firm 1 and 15 are given to Firm 2. A firm can only emit a unit of pollution if they have a permit for that unit, otherwise they must abate. After the permits are allocated, firms are allowed to buy or sell…Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100 - e1 MAC2 = 100 - 4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions ____________ Firm 2’s unregulated level of emissions ____________ Total unregulated level of emissions ______________Suppose we are interested in reducing the carbon footprint associated with heating/cooling buildings oncampus. The functions below describe marginal costs ofCO2abatement (expressed as a function of pollution)for two buildings on the Hendrix College campus. These are hypothetical but are influenced by buildingcharacteristics like age, size, and types of usage. (This information is used for questions 1-4) MCMills = 100−10xM MCSLTC = 75−2.5xS 1. If the College pursued its abatement target by directing each building manager to cut emissions in halffor their respective building, what is the total cost of abatement? 2. If the abatement were pursued with an on-campus carbon tax of$30, would there be the same level ofabatement? Show your work and/or explain. 3. If the goal of the college is to meet the abatement target from question 1, what is the appropriate taxrate? 4. If the appropriate tax rate is used (answer from Q3), how much money can be saved compared to thecommand & control…
- Attached is the marginal abatement costs of three firms, related to the quantity of emissions. Each firm is now emitting 10 tons per week, so total emissions are 30 tons per week. Suppose we wish to reduce emissions by 50 percent, to 15 tons per week. Compare the total cost of doing this: (a) with an equi-proportionate decrease in emissions (b) with a decrease that meets the equi-marginal principle.Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC1 = 10 - 2E1 MAC2 = 4 - E2 If both firms cut their emissions to zero, then total abatement costs (TAC) for both firms is ____. THE ANSWER IS NOT 17Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC 110-2E_1 MAC 2 = 16-4E_2. If both firms were forced to eliminate all of their emissions, their combined total abatement costs (TAC) would be Answer:
- Two firms, Sludge Oil and Northwest Lumber, have access to five production processes, each one of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are as shown in the following table: Process (smoke) Cost to Sludge Oil ($/day) Cost to Northwest Lumber ($/day) The City Council wants to curb emissions by half and decides to auction off four permits, each of which entitles the bearer to emit 1 ton of smoke per day. No smoke may be emitted without a permit. Suppose the government conducts the auction by starting at $1 and asking how many permits each firm wants to buy at that price. If the total is more than four, it then raises the price by $1 and asks again, and so on, until the total quantity of demanded permits falls to four. How much will each permit sell for in this auction? Each permit will sell for $ 3 500 A (4 tons/day) B (3 tons/day) C (2 tons/day) D (1 ton/day) E (8…Suppose we are interested in reducing the carbon footprint associated with heating/cooling buildings oncampus. The functions below describe marginal costs ofCO2abatement (expressed as a function of pollution)for two buildings on the Hendrix College campus. These are hypothetical but are influenced by buildingcharacteristics like age, size, and types of usage. M CMills= 100−10xM M CSLT C= 75−2.5xS If the abatement were pursued with an on-campus carbon tax of$30, would there be the same level ofabatement? Show your work and/or explain.Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC1 = 30 - 6E1 MAC2 = 20 - 10E2. If both firms cut their emissions to zero, then total abatement costs (TAC) for the two firms is ____. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.