ECN437Exercise6

ECN437Exercise6 - ECN437 Exercise6 DueMonday3/5 (SO2 .Youhavethe followingfacts $50,000.Themarginal

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ECN437 Exercise 6 Due Monday 3/5 Suppose you are a state official charged with reducing sulfur dioxide (SO2)  emissions from a group of three electric power plants. You have the  following facts: The marginal damage caused by a ton of SO2 is $50,000. The marginal  benefit of abating a ton of emissions (MBA) is thus $50,000. The three plants differ in the amount they are emitting now and in their  marginal cost of abatement, as shown in the table below. The MCA  variables indicate the marginal cost of abatement at each plant (MCA1 is  the marginal cost in plant 1, etc) as a function of the number of tons of  abatement done by the plant (Q1 is abatement done by plant 1, etc.). None  of the plants are abating emissions now. Plant Current Emissions Marginal Abatement Cost 1 100 MCA1=1000*Q1 2 50 MCA2=10,000*Q2 3 200 MCA3=(10,000/3)*Q3 Please answer the following questions:
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This note was uploaded on 04/02/2012 for the course ECN 437 taught by Professor Peterwilcoxen during the Spring '12 term at Syracuse.

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ECN437Exercise6 - ECN437 Exercise6 DueMonday3/5 (SO2 .Youhavethe followingfacts $50,000.Themarginal

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