Question 8 There are two firms using a lake in a small town. Firm A dumps its emissions into the lake. Firm B uses the lake water as an input in its production process. Not yet answered The below figure illustrates the MAC and MD curves for Firm A and Firm B. Assume initially there is no regulation. Marked out of 9.00 P Flag question Using the above information and figure, complete the below statements, filling in your final, complete answer in the space provided to the right of the statement. Do not show your work or calculations. 7 a.) Prior to regulation, the level of emissions is equal to b.) Prior to regulation, total abatement costs for Firm A are equal to c.) Prior to regulation, total damages for Firm B are equal to d.) Prior to regulation, costs to society are equal to e.) With regulation that leads to a socially efficient outcome, the level of emissions is equal to f.) With regulation that leads to a socially efficient outcome, total abatement costs for Firm A are now equal to g.) With regulation that leads to a socially efficient outcome, total damages for Firm B are now equal to h.) With regulation that leads to a socially efficient outcome, costs to society are equal to i.) The cost savings to society due to this regulation are equal to Previous page Next page