Natural Resource Economics Econ 481 Homework 4. Slow Muddy Farms was established in the 1800s with 237,000 acres that dominated the Slow Muddy River watershed, which also includes the city of Mudville. In the last 70 years Slow Muddy Farms evolved to be a major meat processing business. In a move to reduce regulations and end family bickering, the parent firm separated the feed production, poultry, and pork divisions into three separate firms: Slow Muddy Farms, Slow Muddy Poultry, and Slow Muddy Pork and Bacon. In the past year the Slow Muddy River was declared a non-attainment zone for total nutrients and the state Environmental Protection Department (EPD) considered alternative policies to reduce nutrient loading in the river. Six point sources, with a total nutrient discharge of 46 tons per year, were identified: the 1) chicken, ii) turkey, and iii) egg plants owned by Slow Muddy Poultry, the iv) smoked ham and bacon and v) fresh pork and sausage plant owned by Slow Muddy Pork and Bacon; and vi) the Mudville municipal wastewater treatment plant. The initial goal of the EPD is to reduce total nutrient loading from point sources to 23 tons per year. Abatement cost information for the point sources are provided in Tables 1 - 3. Each table represents the cost of reducing pollution from unabated level to zero emissions. Some plants reported total costs and some reported marginal costs.Table 1: Slow Muddy Poultry: Nutrient Abatement Costs for Processing Plants Table la: Slow Muddy Chicken Processing and Packaging Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 8 0 50 6 160 5 340 4 590 3 340 2 1440 2140 3040 Table 1b: Slow Muddy Turkey Processing and Packaging Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 6 35 4 70 105 140 180 0 225 Table c: Slow Muddy Egg Processing and Packaging Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 180 380 630 0 30Table 2: Slow Muddy Pork and Bacon: Nutrient Abatement Costs for Processing Plants Table 2a: Slow Muddy Bacon and Ham Processing and Packaging Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 12 0 11 20 10 25 9 30 40 7 50 60 70 80 90 120 155 200 Table 2b: Slow Muddy Fresh Pork Packaging Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 6 5 125 3 235 2 375 1 545 0 755 Table 3: Mudville, Wastewater Treatment Plant Annual Tons of Nutrient Total Abatement Cost Marginal Abatement Cost Emissions 10 0 9 25 75 150 6 250 5 375 520 720 980 1330 1830