Question 2 Incorrect Mark 0.00 out of 2.00 Flag question Suppose that two firms emit a certain pollutant. The marginal c

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Question 2 Incorrect Mark 0 00 Out Of 2 00 Flag Question Suppose That Two Firms Emit A Certain Pollutant The Marginal C 1 (40.97 KiB) Viewed 8 times

Question 2 Incorrect Mark 0.00 out of 2.00 Flag question Suppose that two firms emit a certain pollutant. The marginal cost of reducing pollution for each firm is as follows: MC₁ = 300e₁ and MC2 = 100 e2, where e and e2 are the amounts (in tons) of emissions reduced by the first and second firms, respectively. Assume that in the absence of government intervention, each firm generates 80 tons of emissions. Suppose that the regulator introduces a tradable permit system and issues 80 permits, each of which allows the emission of one ton of pollution, and each firm receives 40 permits. By how many tons does firm 1 end up reducing its pollution? Answer: 80 X