Moderate-cost abater and a high-cost abater

Assignment Help Business Economics

Reference no: EM131009716

a. Under a strict command-and-control framework, suppose abatement standards are set equally across polluters. Assume the total abatement target is 30 units. Show the cost implications using three graphs, each of a different polluter with a unique MAC curve drawn to depict a low-cost abater, a moderate-cost abater, and a high-cost abater. On each graph, identify the abatement level corresponding to a uniform standards approach, and show the level of MAC at that point and the area corresponding to TAC.

b. Now, refer directly to your model, and summarize what would happen qualitatively to the abatement levels of each firm if the equimarginal principle of optimality were used. Explain intuitively why this method would be cost-effective.

Reference no: EM131009716

Questions Cloud

Introduced to ten principles of economics : In the first chapter, we are introduced to Ten Principles of Economics. Which of these principles do you observe in your everyday life? -Which of these principles have you never really thought about before? -Which of the principles are you most curio..

Comment on changes in categories of expenditure sources : Comment on the changes in the categories of expenditure sources, i.e., out-of-pocket, health insurance, third party payers, etc. with respect to both year-to-year changes and across the entire period.

What is the circular-flow model : What is the circular-flow model? There are two different loops in the circular-flow model. What is the difference between the two loops? Does the circular-flow model describe reality exactly? Describe one way that you or your family interacts in the ..

Write down the profit maximization problem faced by firm : Alice owns a firm which produces oranges. Alice needs only two types of inputs which we call capital denoted by K and labor denoted by L. Price of capital i.e. the rental rate is r and price of labor i.e. wage rate is w. Each orange sells for p dolla..

Moderate-cost abater and a high-cost abater : Under a strict command-and-control framework, suppose abatement standards are set equally across polluters. Assume the total abatement target is 30 units. Show the cost implications using three graphs, each of a different polluter with a unique MAC c..

Calculate the inverse demand function-elasticity of demand : A firm has the exogenous cost function C(Q) = 354Q-30Q^2 + Q^3. Compute the marginal cost function. Compute the average cost function. For the remaining parts, assume that the demand for the firm’s product is D(P) = 25- √P. Calculate the inverse dema..

Given there is an overwhelming scientific consensus : Given there is an overwhelming scientific consensus that global warming exists, why do many conservatives (like the Republicans running for President) deny its existence?

Independently go shopping for dresses for high-school prom : Three friends (Julie, Kristin, and Larissa) independently go shopping for dresses for their high-school prom. Upon reaching the store, each girl sees only three dresses worth considering: one black, one lavender, and one yellow. Provide the game tabl..

Should you keep on producing the good : Your average total cost is $24; the price you receive for the good is $18. Should you keep on producing the good? Why?

User Account

All Pages