Question
Suppose the marginal benefit of NOx abatement in Phoenix is MBA = 240 - 5A and the marginal cost of abatement is MCA = 10A.
Suppose the marginal benefit of NOx abatement in Phoenix is MBA = 240 - 5A and the marginal cost of abatement is MCA = 10A.
A. (2 points) What is the level of abatement in the absence of regulation?
B. (5 points) What is the efficient level of abatement?
C. (3 points) Suppose Phoenix implements a cap and trade program at the efficient level of abatement. What will the permit price be?
D. (4 points) If an individual factory in Phoenix has marginal abatement costs MCA = 20A, how much will that firm abate under the cap and trade program?
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The Levelling What's Next After Globalization
Authors: Michael O'Sullivan
1st Edition
1541724089, 9781541724082
