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Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 14 - E_1 MAC 2 = 20 - 2E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = 2E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit subsidy on abatement equal to $Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC 1 = 7 - E_1 MAC_2 = 14 - 2E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit tax on emissions. The per-unit tax on emissions is