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1.Suppose now we have two firms, and both of them are involved in the pollution related production activity. in order to restrain the scale of
1.Suppose now we have two firms, and both of them are involved in the pollution related production activity. in order to restrain the scale of production, the government is determined to force them to reduce production by 100 units. The MC for each unit of pollution reduction is shown in the graph
MC1=200e1
MC2=300e2
Previously they produced 200 units and 120 units. Applying the principle of cost effective, how much should each firm cut its pollution
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