Question
Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 15 - 3E. The government introduces a cap-and-trade policy and grandfathers
Imagine a firm with a marginal abatement cost (MAC) function equal to:
MAC = 15 - 3E.
The government introduces a cap-and-trade policy and grandfathers the firm 2 permits initially.Assuming the market price of permits is $3, the firm will spend a total of $___ in order to buy permits.
(Note: your answer can be positive or negative; if it is positive, the firmbuyspermits and your answer represents the firm's total expenditures on permits;if it is negative, the firmsellspermits and your answer represents the firm's total revenues from selling permits).
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