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Unformatted text preview: equal across all polluters. It's easy to see why this has to be true: if marginal costs were not equal, we could reallocate abatement and lower costs. For example, suppose that under one allocation of abatement, source A has a MC of abatement equal to $5 and source B has a MC of abatement equal to $10. If we had source A do one more unit of abatement and source B do one less, we'd get the same total amount of cleanup but it would be $5 cheaper ($10 avoided at B less the $5 cost at A). For further details, see Combining Marginal Abatement Cost Curves ....
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This note was uploaded on 04/05/2012 for the course ECN 437 taught by Professor Peterwilcoxen during the Spring '12 term at Syracuse.
- Spring '12