At the uniform abatement standard described above, find total abatement costs for both firms.

Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below.

MACD = 2.5AD MACC = 3.75AC
TACD = 1.25AD2 TACC = 1.875AC2

To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.


Each firm’s TACsat the uniform abatement standard are calculated as:
TACD= 1.25(30)2 = $1,125. TACC = 1.875(30)2 = $1,687.50
Therefore, the combined TAC is $1,125 + $1,687.50, or $2,812.50

Economics

You might also like to view...

What are the three major types of foreign-exchange systems, and how do they operate?

What will be an ideal response?

Economics

Which of the following statements about the FDIC is correct?

I. The deposit insurance premiums charged by the FDIC to a member bank fully reflect the riskiness of that bank's assets II. The manner in which the FDIC is set up helps protect depository institutions from the rigors of true market competition A) I only B) II only C) Both I and II D) Neither I nor II

Economics

The United States is the largest consumer and importer of grains and other agricultural output in the world

a. True b. False Indicate whether the statement is true or false

Economics

If two goods are often consumed together, they are

a. substitute goods b. inferior goods c. complementary goods d. normal goods e. unrelated goods

Economics