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What is the socially optimal level of each firms pollution

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Reference no: EM13844628

irms A and B each produce 80 units of pollution. The federal government wants to reduce pollution levels. The marginal costs associated with pollution reduction are MCA = 50 + 3QA for firm A and MCB = 20 + 6QB for firm B, where QA and QB are the quantities of pollution reduced by each firm. Society's marginal benefit from pollution reduction is given by MB = 590 - 3Qtot, where Qtot is the total reduction in pollution. What is the socially optimal level of each firm's pollution reduction?

Reference no: EM13844628

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