Suppose the government wants to reduce the total pollution emitted by three firms. Currently, each firm is creating 4 tons of pollution, for a total of 12 tons. The government is considering the following two methods to reduce total pollution to 6 tons:

1. The government sets regulation specifying that each of the three firms must cut its pollution in half.
2. The government allocates two tradable pollution permits to each of the three firms. Each permit allows the firm to emit 1 ton of pollution. Assume the negotiation and exchange of permits are costless.

The following table shows the cost each firm faces to eliminate each unit of pollution.

Cost of Eliminating: Firm X Firm Y Firm Z
First ton of pollution $950 $280 $600
Second ton of pollution $1,650 $300 $720
Third ton of pollution $2,500 $350 $880
Fourth ton of pollution $3,550 $450 $1,050

Suppose the owners of the three firms get together and agree on a trading price of $800 per permit.
Complete the following table with the action each firm will take at this permit price and the amount of pollution each firm will eliminate.

Firm Initial Pollution Permit Allocation (Tons of pollution) Action Final Amount of Pollution Eliminated (Tons of pollution)
Firm X 2
Firm Y 2
Firm Z 2

Determine the total cost of eliminating 6 tons of pollution under each method, and enter the amounts in the following table.

Method Total Cost of Eliminating 6 Tons of Pollution (Dollars)
Regulation
Tradable pollution permits

Question

01-06-2020
Business

contestada

Suppose the government wants to reduce the total pollution emitted by three firms. Currently, each firm is creating 4 tons of pollution, for a total of 12 tons. The government is considering the following two methods to reduce total pollution to 6 tons:

1. The government sets regulation specifying that each of the three firms must cut its pollution in half.
2. The government allocates two tradable pollution permits to each of the three firms. Each permit allows the firm to emit 1 ton of pollution. Assume the negotiation and exchange of permits are costless.

The following table shows the cost each firm faces to eliminate each unit of pollution.

Cost of Eliminating: Firm X Firm Y Firm Z
First ton of pollution $950 $280 $600
Second ton of pollution $1,650 $300 $720
Third ton of pollution $2,500 $350 $880
Fourth ton of pollution $3,550 $450 $1,050

Suppose the owners of the three firms get together and agree on a trading price of $800 per permit.
Complete the following table with the action each firm will take at this permit price and the amount of pollution each firm will eliminate.

Firm Initial Pollution Permit Allocation (Tons of pollution) Action Final Amount of Pollution Eliminated (Tons of pollution)
Firm X 2
Firm Y 2
Firm Z 2

Determine the total cost of eliminating 6 tons of pollution under each method, and enter the amounts in the following table.

Method Total Cost of Eliminating 6 Tons of Pollution (Dollars)
Regulation
Tradable pollution permits

Respuesta :

Otras preguntas

What pamphlet convinced many that the American colonies needed to make a formal break with Great Britain? a. Common Sense b. The Social Contract c. The Wealt

Anais bought 2 1/2 yards of ribbon. She had 1 foot 6 inches of ribbon left after trimming some curtains. How many inches of ribbon did Anais use to trim the cur

Dana is making a seating chart for an awards banquet. There are 184 people coming to the banquet. If 8 people can be seated at each table, how many tables will

Sex is NOT a way to __________. a. prove your love b. increase your self-worth c. bargain for attention d. all of the above

Which process occurs at the anode in an electrochemical cell? (1) the loss of protons (2) the loss of electrons (3) the gain of protons (4) the gain of electron

In a simple electric circuit, a 24-ohm resistor is connected across a 6.0-volt battery. What is the current in the circuit? (1) 1.0 A (3) 140 A (2) 0.25 A (4) 4

A 2.0-kilogram mass is located 3.0 meters above the surface of Earth. What is the magnitude of Earth’s gravitational field strength at this location? (1) 4.9 N/

In a race, a runner traveled 12 meters in 4.0 seconds as she accelerated uniformly from rest. The magnitude of the acceleration of the runner was (1) 0.25 m/s2

True or false Japan experienced outstanding economic growth during the 1970s and 1980s.

Which was not a cause of the Spanish-American War in 1898? a. the sinking of the Maine b. yellow journalism c. Spanish cruelties in Cuba d. President McKinley's

ogbe2k3 ogbe2k3 · Answer 1 · 2020-06-05T03:06:47+02:00

Answer:

The method cost of eliminating 6 is stated below in the explanation section while,The regulation = 4500, The tradable pollution permits = 2700

Explanation:

Solution

Now,

Every Firm will remove the pollution until the cost of eliminating is lower than the cost of permit.

Thus,

Firm A will not eliminate any pollution as cost is higher than the permit cost, he will prefer to buy 2 more permits from other Firm

Firm B will eliminate 4 tons of pollution as cost is lower for elimination therefore will not require permit and thus sell his 2 permits to firm A.

Then

Firm C will eliminate 2 tons as after that cost is higher than the permit cost.

Firm A Action : Eliminate 2 tons and purchase 2 permits, Total tons eliminated 0

Firm B Action: Eliminate 4 tons and sell 2 permits, Total tons eliminated 4

Firm C Action : Eliminate 2 tons, Total Tons eliminated 2

If the government would have regulated then each firm would have to eliminate 2 tons each hence the cost would have been = 950+1650 + 280+300+600+720=4500

While with tradable permits cost is =280+300+350+450+600+720=2700