Two firms, A and B, each currently dump 70 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. It costs Firm A $200 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $100 for each ton of pollution that it eliminates before it reaches the river. The government gives each firm 30 pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? O $9000; $6000 O $12000; $12000 O $4500; $2500 O $12000; $9000

Two firms, A and B, each currently dump 70 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. It costs Firm A $200 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $100 for each ton of pollution that it eliminates before it reaches the river. The government gives each firm 30 pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? O $9000; $6000 O $12000; $12000 O $4500; $2500 O $12000; $9000

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 9P

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