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

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

If society wishes to reduce pollution, why is it more efficient to tax the pollution rather...

If society wishes to reduce pollution, why is it more efficient to tax the pollution rather than set a limit on pollution?

If society wishes to reduce pollution, why is it more efficient to tax the pollution rather...

If society wishes to reduce pollution, why is it more efficient to tax the pollution rather than set a limit on pollution? If the government issues tradeable pollution permits (ie., a cap-and-trade policy), does it matter for economic efficiency (social welfare) whether all firms receive the same amount of permits, or whether some firms receive more permits than others?

Rectangular pre-sedimentation tanks are to be used to remove grit and sand from river water in...

Rectangular pre-sedimentation tanks are to be used to remove grit and sand from river water in a water treatment plant that produces 24000 m3/d drinking water. Use an overflow rate of 20 m3/m2.d and a weir loading rate of 220 m3/m.d and a detention time of 4 hrs. A minimum of two tanks are to be used. Find the following: a. The surface area of each tank. b. Tank dimensions ( L*W*H), use width to length ratio of 4:1, Maximum...

Suppose a pulp and paper mill emits pollution into a river upstream of a commercial fishing...

Suppose a pulp and paper mill emits pollution into a river upstream of a commercial fishing operation. The emissions from the mill damage the fishery by reducing the number of fish that can be caught. The mill benefits from emissions as these are a by-product of pulp and paper production. Explain why the pollution level under point (b) is not an efficient outcome. What is the efficient level of pollution? Explain.

Suppose a pulp and paper mill emits pollution into a river upstream of a commercial fishing...

Suppose a pulp and paper mill emits pollution into a river upstream of a commercial fishing operation. The emissions from the mill damage the fishery by reducing the number of fish that can be caught. The mill benefits from emissions as these are a by-product of pulp and paper production. Describe two objections that have been raised about the usefulness of the Coase theorem.

Producing an industrial good causes pollution to a river. Previously, farmers had used water from the...

Producing an industrial good causes pollution to a river. Previously, farmers had used water from the river to irrigate their fields. Which of the following statements about this externality is not correct? (a) In the absence of well-defined property rights, the free-market equilibrium will be inefficient. (b) The distortion caused by this externality can be corrected using a tax on the output of the industrial good. (c) If property rights are fully defined, and markets are complete with no transaction...

A wastewater plant needs to reduce the methane content in water in a stripping tower to...

A wastewater plant needs to reduce the methane content in water in a stripping tower to 0.3 mol %. The liquid stream is entering the tower with a flow rate of 200 mole/h and contains 0.8 mol % methane. The tower uses pure air for stripping and its temperature and pressure are held constant at 300 K and 1 atm, respectively. The equilibrium relation for methane in the air-water system is ? = 1.2?. a) Find the minimum vapor flow...

Suppose China wishes to reduce the amount of air pollution generated by electrical plants. The marginal...

Suppose China wishes to reduce the amount of air pollution generated by electrical plants. The marginal benefit of electricity is P = 464, 000 − 200Q and the producers’ marginal cost is P = 32, 000 + 70Q. The air pollution presents a negative externality and the marginal external cost of each unit is P = 75.6Q. 1. In the market equilibrium, what is the total cost of the pollution externality? 2. In the socially optimal outcome, what is the...

Under what conditions would it be efficient for two firms to reduce pollution by the exact...

Under what conditions would it be efficient for two firms to reduce pollution by the exact same amount?

14.Suppose that the marginal damages to society from air pollution are MD = 6+ 2e, where...

14.Suppose that the marginal damages to society from air pollution are MD = 6+ 2e, where e is the level of air pollution. Suppose also that the marginal cost of reducing the air pollution on the part of firms is MC = 150 - e. a. Find the optimal level of pollution. Illustrate graphically. b. Find the net gain to society, assuming firms were initially not controlling emissions at all. c. What level of tax would achieve the optimal level...

Subjects