Need Econ Help, Microeconomics

Two firms produce a pollutant called Q. The total costs of reducing emissions of Q are as follows for Firm 1 and Firm 2, respectively:
TC1=10+100Q12
TC2=20 + 50Q22.
This means that the marginal costs of reducing emissions of Q are as follows for Firm1 and Firm2, respectively:
MC1=200Q1
MC2=100Q2.
1. Suppose that a regulator has determined that total emissions of Q must be reduced by 20 units. Determine the cost efficient levels of emissions reduction that should be undertaken by Firm1 and Firm2. Remember that the equimarginal principle requires that marginal costs be equated across the two polluters for emissions reduction costs to be minimized. (10).

2.Suppose that, instead of the cost efficient levels of emissions reduction, the regulator orders that emissions be reduced by 10 units for each firm (20 units total). How much more will this allocation of emissions reductions cost, compared to the cost efficient levels? (5).

3.Your correct answer in A is the cost efficient allocation of emissions reduction. What else would you have to know in order to determine whether this is an efficient level of emissions reduction? In answering this question, recall the difference between cost efficiency and maximizing net benefits. (5).
Posted Date: 11/2/2014 3:13:40 PM | Location :







Related Discussions:- Need Econ Help, Assignment Help, Ask Question on Need Econ Help, Get Answer, Expert's Help, Need Econ Help Discussions

Write discussion on Need Econ Help
Your posts are moderated
Related Questions
what is the profit maximising quantity of L


Reorganisation of Export Councils: India has a large number of exporpromotion councils, commodity boards and other similar agencies, butheir impact on India's foreign trade h

4) The prevention of major swings in economic activity can be handled most easily by the A. household sector B. business sector C. financial sector D. government sector Explain

for the total product curve why is it when you reach at maximum adding more input leads to decline in output?


plot the demand schedule and draw the demand curve for the data given for marijuana in the case above

When Stockwell Day was leader of the Canadian Alliance Party (which soon became the new Conservative Party) he wrote that "the national debt is mortgaging our children's future." A


Derivation of compensated demand curve:  Hicksian compensated demand function for x 1 is given by x 1 =x 1 (p 1 , p 2 , U), where Hicksian compensated demand curve for a good