Consider two firms (Bart and Lisa) that emit a certain pollutant. The marginal cost of reducing pollution for each of the firms is MCB = 300 eB and MCL = 100 eL . hereby, eB and eL are are the amounts of of emissions reduced by "Bart LLC" and "Lisa LLC" respectively. Let's assume that in the absence of government intervention firm Bart generates 100 units of omission and firm Lisa generates 80 units of emission. a) Suppose regulators decide to reduce total pollution by 40 units. In order to be cost effective how much should each firm cut its pollution? b) what emissions fee should be imposed to achieve the cost-effective outcome? how much would each firm pay in taxes? c) suppose that, instead of an emissions fee, the government introduces a Cap-and-trade system and issues 140 permits (each permit allows the emission of 1 ton of pollution). Firm Bart lobbies and uses its political influence to convince the regulatory agency to issue 100 permits to itself, and only 40 permits to firm Lisa. 1) How many if any permits are traded between the firms? 2) What is the minimum amount of money that must be paid in total for these permits? 3) By how many tons does each firm end up reducing its pollution?