There are 2 firms,
firm A and firm B.
Firm A graph: Vertical axis in $= 10
Horizontal axis emitting emissions=20
Firm B graph: Vertical axis in $= 30
Horizontal axis emitting emissions= 20
Question: Determine the MS function of the 2 firms. Initially, each firm must use its 15 permits to reduce its emissions and they are not allowed to trade carbon permits. Illustrate the reduction each firm will make in carbon emissions. How much will each firm pay for abatement?
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