Question
Two difference gas plants resulting in the marginal abatement cost functions (reducing GHG) that differ as follows: 1(1)= 1 2(2)=22 If the plants want to
Two difference gas plants resulting in the marginal abatement cost functions (reducing GHG) that differ as follows: 1(1)= 1 2(2)=22 If the plants want to reduce GHG emissions by 60 units. a. If emission reduction of 30 units for each plant; is the target achieved? Is the total cost of emission reduction minimised? b. If imposes a polluter pays tax of $10 on every unit of GHG emitted. Will the $10 tax achieve the target of 30 units reduction? c. What is the cost minimising level of emissions reduction for each plant that achieves the target reduction of 60 units? d. Illustrate the above results in a suitably labelled graph.
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