A chemical firm's Marginal Abatement Cost is MAC = 60-4E, and its Marginal Damage is MD = 6E.

(a)Draw the MAC and MD lines (on the same graph). What do the horizontal and vertical intercepts of the MAC line mean? (3 marks)

(b)Calculate the socially efficient level of emission. (3 marks)

(c)Calculate the price at the social efficient level of emission you found in part (a). (2 marks)

(d)At the socially efficient level of emission calculate the total abatement cost (TAC), the total damage (TD), and the total social cost (sum of TAC and TD). (4 marks)

(e)Suppose the firm is at emission level of 10 units. Explain why the level of emission you found in part (b) is indeed the socially optimum level of emission? (3 marks)