Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement %3D technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. With an emissions tax of $2, the benefits of adopting the new technologies equal $_ Please round your final answer to two decimal places if necessary. Answer:

Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement %3D technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. With an emissions tax of $2, the benefits of adopting the new technologies equal $_ Please round your final answer to two decimal places if necessary. Answer:

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 4SQ

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Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) Please round your final answer to two decimal places if necessary. Answer is not 2
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