Suppose that the following firms can invest in research and development that could lower their marginal abatement costs by 50% from year 1 to 2.

Year 1 Year 2 Emissions MAC Firm 1 MAC Firm 2 MAC Firm 1 MAC Firm 2 Soala 18 Year 1 Marginal Abatement Costs 10.78 20,66 30,54 40,42 50, 30 2008_2015 60,18 20.12 65 30, 40, 6 70. 5 50, 3 00,0 50 0 10 20 30 40 Emissions 50 60 70 80 +-MAC Firm 1 Year 1 + MAC Firm 2 Year 1 Year 2 Marginal Abatement Costs 0.45 10,39 X 20,33 30.27 40,21 50, 15 0,9 10,7520,6 60, 30, 4540, 3 65,6 70,3 50,15 60,0 25,0 0 10 70 80 20 30 40 50 60 Emissions - MAC Firm 1 Year 2 -MAC Firm 2 Year 2 (a) If the firms face an emissions tax of $6 per tonne, what is the benefit of the new technology? (Hint: calculate the savings in total abatement cost and the tax bill of each firm) (1 point] (b) Suppose that only one of the firms needs to invest in the research and development and the other firm can copy the new technology. If the cost of the research and development was $70 is it optimal for the new technology to be developed? (0.5 points) (c) If the cost of the research and development is $70 and it is not possible to patent the technology will it be developed without any other government intervention