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Imagine that the marginal damage from the lack of pollution reduction is constant and equal to 80. Furthermore, imagine that there are two entities that
Imagine that the marginal damage from the lack of pollution reduction is constant and equal to 80. Furthermore, imagine that there are two entities that contribute to pollution. The first entity can reduce pollution and the marginal cost of reduction is given with MC1 = 2R. The marginal cost of pollutionn reduction in the case of the second entity is equal to MC2 = 2 R. What is the socially optimal amount of reduction of pollution in this case? 0 80 120 200 00
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