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Two firms are ordered by the federal government to reduce their pollution levels. Firm As marginal cost of pollution abatement is MC = 20 +

Two firms are ordered by the federal government to reduce their pollution levels. Firm As marginal cost of pollution abatement is MC = 20 + 4Q, and firm Bs marginal cost of pollution abatement is MC = 10 + 8Q. The social marginal benefit of pollution abatement is MB = 400 4Q

A.) What is the socially optimal level of pollution abatement? What is the optimal level of abatement for each firm?

B.) Depict the solution to this problem using a clearly labeled graph.

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