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Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 11 - 2E_1 MAC_2 = 12 -
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E):
MAC_1 = 11 - 2E_1
MAC_2 = 12 - E_2,
and assume marginal external damages (MED) from aggregate emissions from the two firms (E_Agg = E_1 + E_2) is:
MED = E_Agg.
The socially efficient level of aggregateabatementis ____.
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