The EPA wants to reduce emissions of sulfur dioxides from electric power-generating plants by 20 percent during the next year. To achieve this goal, the EPA will require each power-generating plant in the nation to reduce emissions by 100 tons per year. Suppose five power plants emit sulfur dioxides and serve a given met- ropolitan area. The following table shows the cost per ton of reducing emissions for each of the five plants:

Cost per ton of plant	Emissions Reduction
1	$600
2	500
3	500
4	400
5	200

Instead of using regulations to achieve the 20 percent reduction in emissions discussed in the preceding problem, suppose the EPA requires each of the five emitters to pay a fee of $450 for each ton of sulfur dioxide it dumps in the air during the year. Use the

(a) Use the data from the table above to predict which companies will purchase pollution rights. (b) Which companies will find it cheaper to simply cut back emissions? (c)What is the total cost of achieving the reduction in sulfur dioxide emissions? d)What is the total revenue generated from the sale of pollution rights in the area?