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MAC1 = 16 + 0.5A1 MAC2 = 10 + 2.5A2
Where costs are measured in thousands of dollars.
In your essay:
1.Prove that a uniform standard will not meet the cost-effectiveness criterion.
2.Determine how the abatement levels should be reallocated across the two firms to minimize costs.
Alternitive A: $2,500 initial cost, 10 year economiclife, $500 salvage, $4,500 per year O & M. Buy a new oneevery 10 years Alternitive B: $3,500 initial cost, 20 year economiclife, $500 salvage, $4,000 per year O&M. Buy a new oneevery 20 years.
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