Question
where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost to the firm (in dollars) of
where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost to the firm (in dollars) of this reduction. The government will pay subsidies in the amount of $550 per pound for each pound of the pollutant removed (q). For example, if you can remove q=3 pounds of pollutant, you will receive a subsidy of $550*3.
How many pounds of pollutant should the firm remove each day in order to minimize Net Cost (Cost minus subsidy)?
Step by Step Solution
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Step: 1
To minimize the net cost we need to find the amount of pollutant in pounds that minimizes the net co...
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Step: 2
Step: 3
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
