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Application Coal mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines.

Application Coal mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that marginal cost function for reducing pollution by installing additional capital equipment is MC=40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR=1,000-10P How much pollution reduction should Appalachian Coal Mining Undertake?
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