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
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