Following are some illustrative numbers for benefits and costs arising from a program to restrict emissions of a pollution. Current emissions are 10 tons per month. Identify the emission level at which net benefit would be maximized. Show that this is not the same as the emission level that gives the highest benefit-cost ratio. Explain the discrepancy. Emissions (tons/month) 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 0. Benefits ($ million) 0. 4. 8. 18. 32. 44. 54. 62. 68. 72. 74. Costs ($ million) 0. 2. 4. 6. 9. 14. 21. 36. 48. 64. 86.

Following are some illustrative numbers for benefits and costs arising from a program to restrict emissions of a pollution. Current emissions are 10 tons per month. Identify the emission level at which net benefit would be maximized. Show that this is not the same as the emission level that gives the highest benefit-cost ratio. Explain the discrepancy. Emissions (tons/month) 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 0. Benefits ($ million) 0. 4. 8. 18. 32. 44. 54. 62. 68. 72. 74. Costs ($ million) 0. 2. 4. 6. 9. 14. 21. 36. 48. 64. 86.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 13PAE

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