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Pollution before pe 1.000 tons/year 1,000 tons/year 1,000 tons/year 1,000 tons/year rmits Cost of reducing po $50 $20 $30 $40 llution (per ton per year)

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Pollution before pe 1.000 tons/year 1,000 tons/year 1,000 tons/year 1,000 tons/year rmits Cost of reducing po $50 $20 $30 $40 llution (per ton per year) Without regulation, there are 4 coal burning power plants producing 4,000 tons of pollution per year. Economists have determined that the socially optimal amount of pollution is 2,800 tons/year. The amount of pollution produced by each rm and the cost of reducing pollution for each rm is given below. a. lfthe government issues each rm a non-tradable permit to produce 700 tons of pollution per year, what will be the cost of pollution reduction? b. If the permits are tradable, what will be the cost of pollution reduction and what will the nal amount of pollution be for each rm

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