What is the optimal degree of air cleanliness after change

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Reference no: EM13206029

Quantity of Clean Air (%) Marginal Cost ($) Marginal Benefit ($)

0 50,000 600,000

20 150,000 360,000

40
200,000 200,000

60 300,000 150,000

80 400,000 120,000

100 Infinite 0

a)What is the optimal degree of air cleanliness?

b)What is the optimal degree of air pollution?

c) Suppose that a state provides subsidies for a company to build plants that contribute to air pollution. Cleaning up this pollution causes the marginal cost of air cleanliness to rise by $210,000 at each degree of air cleanliness. What is the optimal degree of air cleanliness after this change?

Reference no: EM13206029

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