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There are 3 industrial firms in Happy Valley: Firm Initial Pollution Level Cost of Reducing Pollution...

There are 3 industrial firms in Happy Valley:

Firm

Initial Pollution Level

Cost of Reducing Pollution by 1 Unit
A 70 units $30
B 60 units $10
C 80 units $50

The government wants to reduce pollution to 150 units and gives each firm 50 pollution permits.

  1. What is the total cost of pollution abatement if the permits are not tradable?

  2. What is the total cost of pollution abatement if the permits are traded at a

    price of $20 each?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
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