5. Suppose there are two rms who can abate their emissions of a pol- lutant; the are currently emmitting P : 100 units each, and can carry out abatement A according to the following cost functions M01 : 10A M02 : 50A The marginal damage of each unit of pollutions given by MD : 500. (a) Depict this situation graphically. 10 points. (b) What is the efcient amount of abatement for each firm? 5 points (c) What is the correct pigouvian tax to achieve this outcome? What is the correct cap-and-trade cap? ((21) Suppose the cap were set at 170 units of pollution; what will the price of a permit be? How can we tell this is inefficient? 5 points