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What is the total abatement cost of achieving the target

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Question - Suppose the government is considering two alternative policies to achieve a target level of emissions for an industry of 500 tonnes. Option 1's approach is summarized by the marginal abatement cost curve: MAC1=800-E1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC2=400-1/2E2. What is the total abatement cost of achieving the target emissions under each policy? Based on this calculation, which of the two policies is the cost-effective choice? Why?

Reference no: EM131709849

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