Is this statement true or false? Explain why it is true or
false.
Two firms, 1 and 2, can control their emissions of a pollutant
according to the following marginal cost equations: MC1
= $1*q1 and MC2 = $1/2*q2, where
q1 and q2 are the amount of emissions
controlled by firm 1 and firm 2, respectively. In
addition, each firm is currently emitting 100 units of pollution
and neither firm is controlling its emissions. Assuming the control
authority has concluded...