Question

In: Economics

Suppose there are two ways to reduce water pollution in a river. Society needs to remove...

Suppose there are two ways to reduce water pollution in a river. Society needs to remove 150 units of pollution (q). The marginal cost of the first method is 2q1. The marginal cost of the second method is 3q2. Society wants to use the most cost-effective way to reduce water pollution. How many units of pollution should be removed using the second method? (Round your answer to two decimal places.

Solutions

Expert Solution

MC1= 2q1, MC2= 3q2

q1+ q2= 150

So, at cost effective solution

MC1= MC2

2q1= 3q2

Put q1= 150-q2

So, 2(150-q2) = 3q2

300-2q2= 3q2

300= 5q2

q2*= 60


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