Refer to Figure 10.10. Show how the relative slopes of the MB and MC functions, and the

Question:

Refer to Figure 10.10. Show how the relative slopes of the MB and MC functions, and the number of countries, N, determine

(a) the magnitude of the efficiency gain from full cooperation, and

(b) the amount by which the cooperative level of abatement exceeds the non-cooperative

(Nash) abatement level.

What conclusions can be drawn from your results?

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