The cost of controlling emissions at a firm goes up rapidly as the amount of emissions reduced goes up. Here is a possible model:

Question

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where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost (in dollars) of this reduction. Government clean-air subsidies to the firm are based on the formula

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where q is again the reduction in emissions (in pounds per day) and S is the subsidy (in dollars). Calculate the net cost function

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given the cost and subsidy above, and find the value of q that gives the lowest net cost. What is this lowest net cost?

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A.
B.
C.
D.
E.

Answer 1

Answer: B