Question

Suppose there is a river on which are located several micro breweries, each of which discharges pollutants into the water. Suppose somebody invents a new technology for treating this waste stream. If adopted by the breweries, the technology could substantially reduce emissions. What are the impacts of this invention on? [8 marks]

1. The actual level of emissions.

2. The efficient level of emissions.

Explain and use a diagram to support your answer.

Answer 1

Introduction-

The actual level of emission done prior was adversely effecting the environment as discharged sent to sea was not properly treated but however with better Technology the discharged now is being treated so environment will not be damaged as such

Explaination -

• a) Though both are almost similar but as asked the ACTUAL LEVEL OF EMISSION done prior will be seen on the upper graph the shaded area on right depicts ,the higher pollution level ; i.e. when the water was not treated before discharging the polloution level was on right of e* on X axis that shows more of emission as we go farther on axis
• However when the Technology improves ,the IMPACT IS - the equilibrium will move back to E on e* which is optimum or Efficient level of emission as marginal cost and benefit intersect here as better technology has reduced the income level as now treated water is discharged : in lower graph E is equilibrium of Efficient level of emission at e*

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