Microeconomics Winter 24 Stefania Alecsia Man 04/30/24 3:15 PM E Homework: HW 6 Question 13, 17.2 Study Exercise 16 HW Score: 77.6%, 11.64 of 15 points Part 3 of 7 Points: 0.12 of 1 Save The accompanying diagram shows the marginal cost of abatement of GHGs for each of two firms, LoCost Inc. and HiCost Inc. The government has imposed a direct regulatory control requiring each firm to abate 40 tonnes of GHGs. 24- MCHiCost a. With the direct regulatory control in place, what is the MC of abatement for each firm? 20 The MC of abatement for LoCost Inc. is $ 8 per tonne of GHGs. The MC of abatement for HiCost Inc. is $ 16 per tonne of GHGs 16- Type whole numbers.) MCLoCost b. In this situation, what is the total combined cost of abating 80 tonnes of GHGs? (Hint: For each firm, the total cost Dollars of abating X tonnes is given by the area under its MC curve up to X.) The total combined cost is $ 640 . 8- 'Simplify your answer.) c. Now suppose the government replaces the direct regulatory control with a cap-and-trade system with the same 4 total intended abatement. Emissions permits are issued to each firm. Suppose also that once trading in permits begins, the equilibrium price is $12 per tonne. With this policy in place, what is the marginal benefit to the firms of abating one extra tonne of GHGs? of 20 40 60 80 100 Tonnes of GHG Emissions Abated The marginal benefit to LoCost Inc. of abating one extra tonne of GHGs is $ . The marginal benefit to HiCost Inc. of abating one extra tonne of GHGs is $. (Type whole numbers.) V Etext pages Grapher Ask my instructor Clear all Check