As an environmental economist you are asked to present

alternative ways two companies $($company $1$ and company $2)$

can engage in abating the damage to the environment. You

decide to suggest a market$-$based approach to address this

problem. With the help of environmental engineers, the

following marginal and total abatement cost equations are

estimated for each company, measured in thousands of dollars

depending on the level of abatement measured $A_1$ and $A_2.$

Firm $1$:

$TA{C}_1=1000+2\mathrm{.}5(A_1{)}^2$

$MA{C}_1=5A_1$

Firm $2$:

$TA{C}_2=500+1\mathrm{.}5(A_2{)}^2$

$MA{C}_2=3A_2$

The government mandates that at least $16$ units of abatement are

achieved to ensure environment protection and damage control.

This figure can be divided equally between the two companies

or in any other arrangement you may suggest.

You are asked to write your proposal and present your

assessment in response to the questions. Please scroll down and

feel free to use this file as your template to answer each

question.

What is each company's total abatement cost if the

government forces each company to abate half the

mandated abatement level?