Workers and retirees live together in a neighborhood with emissions from a nearby factory causing pollution....

Workers and retirees live together in a neighborhood with emissions from a nearby factory causing pollution. The marginal damages for workers is 2e and the marginal damages for the retirees is 6e. The polluting factory has a marginal savings of 20 − 2e.

1) What is the MPB of workers and retirees? What is the aggregate MSB?

2) what is the factory's marginal abatement cost (MAC)?

3) whats the optimal abatement level?

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Expert Solution

Rahul Sunny answered 1 year ago

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