Suppose the MSC of cleaning Puget Sound is modeled as MSC = 10 + 1.4A, where A i

Question

Suppose the MSC of cleaning Puget Sound is modeled as MSC = 10 + 1.4A, where A is the percentage of phosphorus abated and MSC is measured in millions of dollars.

a. Find the incremental costs of a policy initiative that increases the phosphorus abatement level from 30 percent to 40 percent.

b. Graphically illustrate using the MSC function, labeling clearly where incremental costs are shown.                                                                                                                                    

Explanation / Answer

Details Amount Current MSC of cleaning puget 10+1.4A (10)+(1.4*0.3)*10^6                    4,20,010.00 Revisd MSC of cleaning puget at 40% abated level (10)+(1.4*0.4)*10^6                    5,60,010.00 Incremental Cost                    1,40,000.00

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