Let's consider pollution control alternatives for two polluting firms with equal pollution but different pollution control costs.

Quantity Of Pollution Abatement	Each Firm's Total Pollution Harm In $	Each Firm's Marginal Benefit Of Abatement	Total Abatement Cost Firm 1	Marginal Abatement Cost Firm 1	Total Abatement Cost Firm 2	Marginal Abatement Cost Firm 2
0	200	0	0	0	0	0
1	120	80	20	20	5	5
2	70	50	70	50	13	8
3	40	30	140	70	27	14
4	20	20	240	100	47	20
5	10	10	380	140	97	50

1. If the government requires all firms to clean-up to the maximum technically feasible level of 5 units of abatement, what are the total costs of abatement for each firm, and for both combined? What are the total benefits and net benefits to society from this level of clean-up?
2. Now assume that each firm will clean up to where the marginal benefits equal the marginal costs. How much pollution will each firm eliminate? What are the total and costs of abatement for each firm and for both firms combined?What are the total and net benefits to society from this level of clean-up?
3. If the government modifies the standard in part B to 3 units of pollution abatement for every firm, find the total costs and for each firm and for both firms combined. Then find the total and net benefits of pollution abatement. Answers compare to those in part C?
4. If the government passed a $21 tax on pollution emissions, how much pollution would each firm eliminate? Find the total abatement costs and benefits under this policy. Tax revenue is not included in abatement costs.