The cost of controlling emissions at a firm rises rapidly as the amount of emissions reduced increases. We have the possible model, C(q) = 1,000 + 100q2 where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost (in dollars) of this reduction. (a) If a firm is currently reducing its emissions by 10 pounds each day, what is the marginal cost of reducing emissions further? per one pound reduction in daily emissions (b) Government clean-air subsidies to the firm are based on the formula S(q) = 5009, where q is again the reduction (in pounds per day) and S is the subsidy (in dollars). At what reduction level does the marginal cost surpass the marginal subsidy? pounds of pollutant per day (c) Calculate the net cost function, N(g) = C(g) - S(g), given the cost function and the subsidy above. N(g) = Find the value of q that gives the lowest net cost. pounds of pollutant per day What is this lowest net cost? per day Compare your answer to that for part (b) and comment on what you find. This value is ---Select--. q in part (b).
The cost of controlling emissions at a firm rises rapidly as the amount of emissions reduced increases. We have the possible model, C(q) = 1,000 + 100q2 where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost (in dollars) of this reduction. (a) If a firm is currently reducing its emissions by 10 pounds each day, what is the marginal cost of reducing emissions further? per one pound reduction in daily emissions (b) Government clean-air subsidies to the firm are based on the formula S(q) = 5009, where q is again the reduction (in pounds per day) and S is the subsidy (in dollars). At what reduction level does the marginal cost surpass the marginal subsidy? pounds of pollutant per day (c) Calculate the net cost function, N(g) = C(g) - S(g), given the cost function and the subsidy above. N(g) = Find the value of q that gives the lowest net cost. pounds of pollutant per day What is this lowest net cost? per day Compare your answer to that for part (b) and comment on what you find. This value is ---Select--. q in part (b).
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 17SQ
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