The marginal cost of reducing the emissions if a firm is reducing its emissions by 10 pounds each day, where the cost model C ( q ) = 4 , 000 + 100 q 2 controls the emissions at a firm when the amount of emissions reduced further, where q is the reduction in emissions(in pounds per day) and C is the daily cost (in dollars) of the reduction.
The marginal cost of reducing the emissions if a firm is reducing its emissions by 10 pounds each day, where the cost model C ( q ) = 4 , 000 + 100 q 2 controls the emissions at a firm when the amount of emissions reduced further, where q is the reduction in emissions(in pounds per day) and C is the daily cost (in dollars) of the reduction.
Solution Summary: The author calculates the marginal cost of reducing the emissions if a firm reduces its emissions by 10 pounds each day.
To calculate: The marginal cost of reducing the emissions if a firm is reducing its emissions by 10 pounds each day, where the cost model C(q)=4,000+100q2 controls the emissions at a firm when the amount of emissions reduced further, where q is the reduction in emissions(in pounds per day) and C is the daily cost (in dollars) of the reduction.
(b)
To determine
To calculate: The level of reduction to which the marginal subsidy is surpassed by marginal cost if the formula of clean air subsidies to the firm by the Government is S(q)=500q where q is the reduction in emissions (in pounds per day) and S is the subsidy (in dollars) and the cost model is C(q)=4,000+100q2.
(c)
To determine
To calculate: The net cost function, N(q)=C(q)−S(q) if the formula of clean air subsidies to the firm by the Government is S(q)=500q where q is the reduction in emissions (in pounds per day) and S is the subsidy (in dollars) and the cost model is C(q)=4,000+100q2 which controls the emissions at a firm when the amount of emissions reduced further. Also, the value of q that gives minimum net cost and compare the result from part (b).