Answered step by step
Verified Expert Solution
Question
1 Approved Answer
There are two factories in a small town. Both of them emit carbon dioxide into the air. Their current monthly emissions, as well as their
There are two factories in a small town. Both of them emit carbon dioxide into the air. Their current monthly emissions, as well as their total costs for reducing emissions in 20-ton increments, are listed in the tables below. Current emissions (tons/month) 120 Total cost of reducing emissions by 20 tons/month $50 Total cost of reducing emissions by 40 tons/month $150 Total cost of reducing emissions by 60 tons/month $270 Total cost of reducing emissions by 80 tons/month $410 Total cost of reducing emissions by 100 tons/month $570 Factory 1 Current emissions (tons/month) 160 Total cost of reducing emissions by 20 tons/month $20 Total cost of reducing emissions by 40 tons/month $60 Total cost of reducing emissions by 60 tons/month $110 Total cost of reducing emissions by 80 tons/month $200 Total cost of reducing emissions by 100 tons/month $300Assume that the existing technology does not allow for reductions in emissions beyond 100 tons/month. That is, the most each factory can reduce its emissions is 100 tons/month. Also assume that if a factory owner is indifferent between reducing pollution or paying taxes, the factory owner will choose to reduce pollution. With those assumptions in mind, suppose the government has a goal of reducing total monthly emissions by 80 tons. To achieve this goal, the government has decided to impose a tax on pollution, That is, for every 20-ton emission, a factory will have to pay some amount of money, To achieve (but not exceed) the desired reduction in emissions, the tax will have to be set equal to or above $ but below $ per 20 tons/month
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started