n https:/g.cengage.com/staticb/ui/evo/index.h Megan v CENGAGE | MINDTAP My Home Homework (Ch 10) Back to Assignm Catalog and Study T Attempts Keep the Highest / 5 Rental Options S. Correcting for nega College Success Tips nt wants to reduce the total pollution units of pollution in the Career Success Tips rea, for a total of 12 pollution units. If the governn ween the following two thods: Help Give Feed Available Methods to Reduce Pollution 1. The government sets pollution standards using re 2. The government allocates tradable pollution permits. Each firm faces different costs, so reducing pollution is more diff ble shows the cast each firm faces to eliminate each unit of pollution. For each firm, assume that the cost of reducing g pollution minating all 4 units of pollution) is prohibitively expensive. Cost of Eliminating the... First Unit of Pollution Second Unit of Pollution Third Unit of Pollution Firm (Dollars) ( Dollars) (Dollars) Firm X 55 70 110 Firm Y 650 1,500 Firm 125 180 Now, imagine that two government Method 1: Regulation The first government employee suggests limiting pollution through regulation. To meet the pollution goal, th requires each firm to reduce its pollution by 2 units. Complete the following table with the total cost to each firm of reducing its pollution by 2 units Total Cost of Eliminating Two Units of Pollution Firm (Dollars) Firm X Firm Firm Z Method 2: Tradable Permits Meanwhile, the other emp ent strategy to achie n in the area from 12 units 6 units. This employee suggests that the two pollution perm 1 unit of pollution. Firms are free to trade pollu with one another (that is, buy a both firms can agree on a price. For example, if firm X agrees to sell a permit to firm Y at an agreed-u d end up with three permits and would need to reduce its pollution by only 1 unit while firm X pollution by 3 units. Assume the nego and exchange of permits are cost Because firm Y has high pollution reduction costs, it thinks it might hit from firm X and a permit from firm 2 so that it doesn't have to reduce its own pollution emissions. At which of the following price are both firm X and firm Z willing to sell one of their permits to firm Y? Check all that apply $93 $171 $178 $367 $384 Suppose the the government has set the trading price of a permit at $129 per permit.Complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount it costs each firm to reduce pollution to the necessary level. If a firm is willing to buy two permits, assume that it buys one permit from each of the other firms. (Hint: Do not include the prices paid for permits in the cost of reducing pollution ) Initial Pollution Permit Final Amount of Pollution Cost of Pollution Allocation Eliminated Reduction Firm (Units of pollution) Action "Units of pollution) (Dollars) Firm X Firm Y Firm Z Regulation Versus Tradable Permits Determine the total cost of eliminating six units of pollution using both methods, and enter the amounts in the following table. (Hint. You might need to get information from previous tasks to complete this table ) Total Cost of Eliminating Six Units of Pollution Proposed Method (Dollars) Regulation Tradable Permits In this case, you can conclude that s allution is costly to socks Type here to search O