Reference no: EM133363988

Question: Chicago is mandated to reduce annual NOx emissions by 120 units. The environmental planners are deciding how to allocate the abatement mandate between cars and power plants. The marginal costs of abatement from cars (QC) and abatement from power plants (Qp) are MACC = Qc and MAcp = 1/2 Qp 3) Graph the two marginal cost lines on a well-labeled two-sided graph. 3) The traditional approach has been to assign all 120 units of abatement to the power plants, i.e., Qc = 0 and Q, = 120. What is the total cost of abatement under this system? Calculate and show it on your graph. :) The planners have hired you to tell them what the cheapest way is for the city to divide the 120 units of abatement between the two sources. What do you tell them? (i.e., what are Qc" and Qp*?) 1) How does the total cost of the allocation you found in part (c) compare to the total cost of the allocation given in (b)? Calculate the difference.