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The town of Pollutionville has two smelting factories, Factory A and B. Each factory produces air pollution. Factory As marginal abatement costs are given by
The town of Pollutionville has two smelting factories, Factory A and B. Each factory produces air pollution. Factory As marginal abatement costs are given by MACA=20-0.5eA. Factory Bs marginal abatement costs are given by MACB=40-eB. The Pollutionville City Council wants to introduce a constant per unit emissions tax that will reduce total emissions from the two factories by 18.75% cost-effectively. The total tax receipts the Council would collect from such a tax would be $ _______________.
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