What would the total cost of the pollution cap be

Reference no: EM132137814

Question: There are three industrial firms in Happy Valley:

Firm A- Pollution Level=70 Units Cost to reduce Pollution=$20/Unit

Firm B- Pollution Level=80 Unites Cost to reduce Pollution= $25/Unit

Firm C- Pollution Level=50 Units Cost to reduce Pollution=$10/Unit

1.The government is considering options to reduce the pollution level to 90 total units. Suppose they decide to impose a 30 unit cap per firm. What would the total cost of the pollution cap be?

2. Suppose the government decides to impose a pollution tax of $21 per unit. This tax will reduce the overall level of pollution to how many units?

3. How much tax revenue would a $21 per unit pollution tax generate?

Reference no: EM132137814

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