This preview shows page 1. Sign up to view the full content.
Unformatted text preview: 2 )= 8A 2 and MAC(A 3 )= 24A 3 . Currently they each produce 100 thousand emissions each year. a) Graph the individual MAC curves b) Find the aggregate marginal abatement cost. Graph it in your previous figure c) Suppose that the government will require each firm to cut back emissions to 50 thousand per year. What would the total abatement cost be under such standard? d) If instead the government would set an emission fee to achieve the same total level of emissions as in (b), what would the total abatement cost be? How does it compare to your answer in (c)? e) If the people of Summersville all have the same MD i = 0.00008e, and there are 50,000 residents, what is the efficient level of abatement? f) What Pigovian fee would support the abatement level you found in (e)? g) How much would each firm abate if they are charged the fee you found in (f)?...
View Full Document
This note was uploaded on 01/27/2011 for the course ARE 176 taught by Professor Farzin during the Fall '08 term at UC Davis.
- Fall '08