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magine a firm's marginal abatement cost function with existing technologies is: MAC = 10 - E. If the firm adopts new pollution abatement technologies, its
magine a firm's marginal abatement cost function with existing technologies is: MAC = 10 - E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 5 - 0.5E. The adoption costs for the new technology are $6.If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $_____.
HINT:Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology.
Select one:
a.$8.
b.$6.
c.$10.
d.$12.
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