The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution.FirmTotal Discharge (in tons)Marginal Cost of Cleanup(per ton)Total Cost of CleanupA60$5.00$300B70$8.00$560C80$7.50$600D90$4.00$360The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes. If the goal of the government is to reduce pollution by 50 percent, the cheapest way would be to have:
A. have each firm reduce discharge by 37.5 tons.
B. all four firms cut their discharge by 50 percent
C. have firms A and D stop discharging and allow B and C to continue.
D. have firms B and C stop discharging and allow A and D to continue.
Answer: C
You might also like to view...
In recent years, bank regulatory authorities have
A) encouraged banks to enter the insurance field. B) discouraged banks from entering the insurance field. C) asked Congress to write new legislation that would make it illegal for banks to enter the insurance field. D) asked Congress to write new legislation that would make it legal for banks to enter the insurance field.
In the 1980s, banks __________ the amount of highly speculative loans they were holding due to __________ deposit rates
A) increased; rising B) increased; falling C) decreasing; rising D) decreased; falling
All of the following concerns have been raised about crowd funding EXCEPT:
A) possibility of fraud B) lack of liquidity C) information costs D) limits access to funds for business start ups
Which of the following is a characteristic of an oligopolistic industry? a. Each firm faces many competitors who sell identical products. b. Many firms compete to sell similar, but differentiated, products. c. Firms face no competitors
d. A few large firms have all or most of the sales in an industry.