Please Help.

Question 1. Polly owns an electric power plant in the city of Newtown. The market price of electricity in Newtown is $1.00 per kilowatt hour (kwh). Polly's marginal costs of electricity production are MC=.5+0.025Q, where Q is the number of kwh generated. Jack owns a laundry service that operates next door to Polly's power plant. Jack's specialty in town is the \"spring fresh" scent he achieves by airdrying laundry outside. In producing electricity, Polly also produces smoke. Unfortunately, Polly's smoke dirties Jack's laundry, creating costs for Jack of $0.25 for each kwh Polly produces. Please suggest at least possible solutions to the market failure in this situation (No calculation is needed, but policy suggestions must be aligned with this specific case). Question 2. Assume that there are two electric power plants (firm 1 and rm 2) that burn coal to generate electricity, emitting sulfur dioxide, an air pollutant, in the process. They can reduce emissions at the following marginal costs, where q: is tons of emissions abatement by firm 1, and qz is tons of abatement by firm 2: M'C1 =12q1 M'C2 = 49'2 Assume that unregulated emissions are 40 tons for each firm, for a total of 80 tons. 2.1 An environmental regulator must reduce total emissions of sulfur dioxide by 20 tons. To achieve the costeffective allocation of control responsibility,- which firm would choose to achieve more emission abatement and why? (Calculation is not required.) 2.2 Do you think the regulator could achieve the same 20-ton reduction objective using an emissions tax, why and why not