Two firms that produce sulfur dioxide emissions

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Reference no: EM131071624

Suppose there are two firms that produce sulfur dioxide emissions, Firm A and Firm B. Each firm emits 30 tons of sulfur dioxide per year. The cost of reducing one ton of sulfur is $200 for Firm A and $250 for Firm B.

a. Firm A would be willing to reduce its emissions by 5 tons if Firm B paid it at least $___________.

b. If Firm B emits 60 tons of sulfur dioxide and Firm A emits zero tons, social costs increase/decrease.

Reference no: EM131071624

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