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The cost of controlling emissions at a firm goes up rapidly as the amount of emissions reduced goes up. Here is a possible model, C
The cost of controlling emissions at a firm goes up rapidly as the amount of emissions reduced goes up. Here is a possible model,
C(x,y) =3,000+800x2+300y2,
wherexis the reduction in sulfur emissions,yis the reduction in lead emissions (in pounds of pollutant per day), andCis the daily cost to the firm (in dollars) of this reduction. Government clean-air subsidies amount to $400per pound of sulfur and $900per pound of lead removed. How many pounds of pollutant should the firm remove each day to minimizenetcost (cost minus subsidy)?
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