The cost of reducing each unit of pollution costs firm A $10 for the first unit of pollution abated (or reduced), $20 for the second unit abated, $30 for the third, $40 for the fourth, $50 for the fifth, $60 for the sixth and $70 for the seventh unit of pollution that is not emitted. For firm B the costs of reducing pollution are $5 for the first unit not emitted, $15 for the second unit abated, $35 for the third unit, $37 for the fourth unit, $45 for the fifth unit, $55 for the sixth unit not emitted and $65 for the seventh unit not emitted.

Question

anonymous · Answer

continuation of question:
What is the total level of abatement (or the total reduction) in pollution after the tax has been implemented?
a) 5 units
b) 6 units
c) 7 units
d) 8 units

anonymous · Answer

* The government imposes a tax of $31 for each unit of pollution emitted. What is the total level of abatement (or the total reduction) in pollution after the tax has been implemented?