A polluter has abatement costs given by MAC = 405-0.15E, and the emissions cause damages given by MD = 0.1E. The governm

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A Polluter Has Abatement Costs Given By Mac 405 0 15e And The Emissions Cause Damages Given By Md 0 1e The Governm 1 (56.62 KiB) Viewed 13 times

A polluter has abatement costs given by MAC = 405-0.15E, and the emissions cause damages given by MD = 0.1E. The government has a law that requires the polluter to pay for damages they cause, but they will only have to pay if the government catches the polluter emitting. If the polluter knows there is only a 68% chance that the government will catch the polluter, and they choose their optimal emission level, how much total damage will they cause?