2. Two firms control emissions at the following marginal costs: MC; = $200q1, MC2 = $1002, where q, and qz are, respectively, the amount of emissions reduced by the first and second firms. Assume that with no control at all, each firm would be emitting 20 units of emissions or a total of 40 units for both firms. Assume that a total reduction of 21 units is mandated. (a) Determine the cost-effective allocation of control responsibility and compute the market permit price and eventual permit allocation that would result if costless trading were permitted (b) Suppose the initial permit allocations were freely distributed and consisted of 15 permits to the first source and 4 permits to the second source. What would be the level of expenditure transferred between the two sources with the commencement of trading? (c) Suppose a new source with a marginal control cost of $50(q) now enters the domain of source one and source two. If this new source were to add 35 units of pollution, in the absence of any pollution control, compute the new permit price that would eventually result if costless trading were permitted (note: the # of permits remains the same). (d) What trades would occur and what level of expenditure would be transferred between the three sources with the re-commencement of trading, (e) What are the total control costs for the three sources after trading