Two firms, A and B, each currently dump 100 tons of pollutants into the air. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. It costs Firm A $30 for each ton of pollution that it eliminates, and it costs Firm B $50 for each ton of pollution that it eliminates. The government gives each firm 80 pollution permits. Enter answers as whole numbers, no decimals. A What is the total.cost (total for both firms) of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? S B. What is the total.cost (total for both firms) of reducing pollution if the firms are allowed to buy and sell permits from each other? (Assume that the market price for tradeable pollution permits is $40 each) $

Two firms, A and B, each currently dump 100 tons of pollutants into the air. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. It costs Firm A $30 for each ton of pollution that it eliminates, and it costs Firm B $50 for each ton of pollution that it eliminates. The government gives each firm 80 pollution permits. Enter answers as whole numbers, no decimals. A What is the total.cost (total for both firms) of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? S B. What is the total.cost (total for both firms) of reducing pollution if the firms are allowed to buy and sell permits from each other? (Assume that the market price for tradeable pollution permits is $40 each) $

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 10PA

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