1.  The total cost of Firm D  eliminating 4 units of pollution   2. Determine the total cost of each firm eliminating one unit of production.   3.  The community has decided that the managers of the firms are allowed to produce a total of 4 units of production.   Identify the firm(s) that will pollute.

Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 7SQ
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D.    Pollution problem

You know the marginal cost of reducing pollution for four factories.  Each unit of pollution can be eliminated according to the following marginal costs.

 

A

B

C

D

First Unit

$65

$15

$30

$10

Second Unit

$75

$55

$65

$30

Third Unit

$85

$85

$110

$40

Fourth Unit

$120

$155

$120

$60

 

1.  The total cost of Firm D  eliminating 4 units of pollution

 

2. Determine the total cost of each firm eliminating one unit of production.

 

3.  The community has decided that the managers of the firms are allowed to produce a total of 4 units of production.   Identify the firm(s) that will pollute.

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