Suppose there are 2 petrochemical companies that cause water pollution in the surrounding environment with marginal costs MC1 = 150e1 and MC2 = 50e2 (where e1 and e2 are the amount of waste in m3 reduced by company 1 and company 2). Initially, company 1 disposed of 50 m3 of waste and company 2 disposed of 40 m3 of waste. a. If the government wants to ensure the total waste is reduced by 20 m3 with a cost-effective approach, how much waste must each company reduce?
Suppose there are 2 petrochemical companies that cause water pollution in the surrounding environment with marginal costs MC1 = 150e1 and MC2 = 50e2 (where e1 and e2 are the amount of waste in m3 reduced by company 1 and company 2). Initially, company 1 disposed of 50 m3 of waste and company 2 disposed of 40 m3 of waste. a. If the government wants to ensure the total waste is reduced by 20 m3 with a cost-effective approach, how much waste must each company reduce?
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 3SQ: From an economic viewpoint, the optimal amount of pollution a. is zero because all pollution imposes...
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Suppose there are 2 petrochemical companies that cause water pollution in the surrounding environment with marginal costs MC1 = 150e1 and MC2 = 50e2 (where e1 and e2 are the amount of waste in m3 reduced by company 1 and company 2). Initially, company 1 disposed of 50 m3 of waste and company 2 disposed of 40 m3 of waste.
a. If the government wants to ensure the total waste is reduced by 20 m3 with a cost-effective approach, how much waste must each company reduce?
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