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need detailed responses on how answer was achieved Suppose there are two firms MaxinC, and Lori LLC. Each firm emitts 30 units of pollution Currently.
need detailed responses on how answer was achieved
Suppose there are two firms MaxinC, and Lori LLC. Each firm emitts 30 units of pollution Currently. The California. Aic resources Board wants to drastically reduce emissions from the two firms to 20 units total between both Firms. They have heard of an amazing thing called a cap and trade They decide to give lo pollution Permits to each firm. Each Permit allows the holder 1 unit of emissions. Assume that the following is true and known, where TAL is total abatement cost. A is units of pollution abated. MAC is marginal abatement cost and subscript M indicates max and subscript L indicates Lori: TAC n = 10 +.75 AM MACM = 1.5+ Am TACL = 5+. 5AL MACLEAL a. If each firm keeps its to Permits how much will they each spend in total to reduce emissions? b. Is there a more cost efficient way to allocate emissions than the one in parta?? Please explain & Find solution C. How much will the two firms each spend in total to reduce emissions at the cost efficient solution in terms of abatement Cost only d. How many permits will be cold? which Frm will ? Sell them? How much will they for? Assume the Permits have to be sold for the same price each Step by Step Solution
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