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5. Fifth and nally, we return to the framework of question 2 (with a single rm providing both types of car) to consider Clean car standards instead of a Clean car discount. Assume that To = 0,11 = D. That is, a rm does not have to pay any taxes, but it must keep average 002 emissions per kilometre travelled of the cars it sells down to some required level, :3. Let 002 per kilometre of the two types of car be xed (per vehicle) at 120 for type 0 cars and 80 for type 1 cars. This means that the only way a rm can reduce its average is to sell a higher proportion of the more fuel e'icient type. The regulation requires a rm to choose Q0, Q1 to satisfy the following constraint: 120620 + 80621