MAC2 10F- MACI Tax-$7.50/ton 250 Firm 1 100 250 Firm 2 Pollution Abated (tons) (
ID: 1115758 • Letter: M
Question
MAC2 10F- MACI Tax-$7.50/ton 250 Firm 1 100 250 Firm 2 Pollution Abated (tons) (2 points) If the government requires each firm to reduce its pollution by 250 tons, what is the total cost for each firm? a. Firm 1 Firm 2: b. (2 points) If, instead of requiring both firms to reduce emissions of pu edam by the same amount, the government imposed a tax of $7.50 per ton of emission, how much would each firm reduce their emissions? Firm 1 Firm 2: (2 points) According to the graphs, when the tax is $7.50 per ton, what is the marginal cost for each firm at the level of pollution reduction that they choose? c. Firm 1 Firm 2 2 of 4Explanation / Answer
Answer : 1. According to the figure total cost for Firm 1 to reduce pollution emission tonnes = $5*250 = $1250
Total cost for Firm 2 to reduce pollution emission tonnes = $10 *250 = $2500
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Answer 2 : Firm 1 opt for reduction of 250 tons of pollution abated because paying tax is more costlier proposal as compare to Firm 2 opt for no reduction because paying tax is a cheaper source as compare to the pollution reduction technology.
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Answer 3 : Firm 1 choose 250 tonnes of pollution abatment because it is cheaper for the firm to reduce the pollution as compare to pay tax where as Firm 2 choose 100 tonnes or less than 100 tonnes to reduce the pollution as it is more costlier than paying taxes.
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Answer : In perfect competition the price is determined where P= AVC It means that price is zero and quantity supplied in the market is 600 units.
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Answer : In monopoly the Alregin and Nari charged price where there is higher revenue and profit. It means that price is $120 where the monopoly earns maximum profit is $36000. The quantity of units is 300.
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Answer:Both Alregin produced 150 units and Nari has 150 units of production.
PRICE QTY ( IN BARRELS) TR 0 600 0 20 550 11000 40 500 20,000 60 450 27,000 80 400 32,000 100 350 35000 120 300 36000 140 250 35000 160 200 32000 180 150 27000 200 100 20000 220 50 11000 240 0 0Related Questions
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