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Suppose that two firms, X and Y, face the following marginal abatement costs (MACX and MACY) and total abatement costs (TACX and TACY) which depend on the amount of abatement each performs (Ax and Ay): MACX = 1.0Ax TACX = 0.5AX2 !! %3D MACY = 3.0Ay TACY = 1.5AY2 %3D Assume that the combined abatement standard for both firms is 30 units. In other words, Ax + Ay 30. Select the four statements below that are correct. Note: This exercise combines four test questions. Each correct selection will have the same weight as a regular test question and will be graded separately, so take your time. Select 4 correct answer(s) If the government uses a uniform standard, the combined total abatement cost for both firms is $120. If the government uses a uniform standard, the combined total abatement cost for both firms is $450. If the government uses a uniform standard, the combined total abatement cost for both firms is $1,800. O If the government uses a uniform standard, the combined total abatement cost for both firms is $7,200. O If the government uses a uniform standard, the combined total abatement cost for both firms is none of the above.

Suppose that two firms, X and Y, face the following marginal abatement costs (MACX and MACY) and total abatement costs (TACX and TACY) which depend on the amount of abatement each performs (Ax and Ay): MACX = 1.0Ax TACX = 0.5AX2 !! %3D MACY = 3.0Ay TACY = 1.5AY2 %3D Assume that the combined abatement standard for both firms is 30 units. In other words, Ax + Ay 30. Select the four statements below that are correct. Note: This exercise combines four test questions. Each correct selection will have the same weight as a regular test question and will be graded separately, so take your time. Select 4 correct answer(s) If the government uses a uniform standard, the combined total abatement cost for both firms is $120. If the government uses a uniform standard, the combined total abatement cost for both firms is $450. If the government uses a uniform standard, the combined total abatement cost for both firms is $1,800. O If the government uses a uniform standard, the combined total abatement cost for both firms is $7,200. O If the government uses a uniform standard, the combined total abatement cost for both firms is none of the above.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition
Section: Chapter Questions
Problem 9E
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Suppose that two firms, X and Y, face the following marginal abatement costs (MACX and MACY) and total abatement costs (TACX and TACY) which depend on the amount of abatement each performs (Ax and Ay): MACX = 1.0Ax TACX = 0.5Ax? %3D %3D MACY = 3.0Ay TACY = 1.5A,2 %3D %3D Assume that the combined abatement standard for both firms is 30 units. In other words, Ax + Ay = 30. %3D Select the four statements below that are correct. Note: This exercise combines four test questions. Each correct selection will have the same weight as a regular test question and will be graded separately, so take your time. Select 4 correct answer(s) If the government uses a uniform standard, the combined total abatement cost for both firms is $120. If the government uses a uniform standard, the combined total abatement cost for both firms is $450. If the government uses a uniform standard, the combined total abatement cost for both firms is $1,800. O If the government uses a uniform standard, the combined total abatement cost for both firms is $7,200. O If the government uses a uniform standard, the combined total abatement cost for both firms is none of the above.
Transcribed Image Text:Suppose that two firms, X and Y, face the following marginal abatement costs (MACX and MACY) and total abatement costs (TACX and TACY) which depend on the amount of abatement each performs (Ax and Ay): MACX = 1.0Ax TACX = 0.5Ax? %3D %3D MACY = 3.0Ay TACY = 1.5A,2 %3D %3D Assume that the combined abatement standard for both firms is 30 units. In other words, Ax + Ay = 30. %3D Select the four statements below that are correct. Note: This exercise combines four test questions. Each correct selection will have the same weight as a regular test question and will be graded separately, so take your time. Select 4 correct answer(s) If the government uses a uniform standard, the combined total abatement cost for both firms is $120. If the government uses a uniform standard, the combined total abatement cost for both firms is $450. If the government uses a uniform standard, the combined total abatement cost for both firms is $1,800. O If the government uses a uniform standard, the combined total abatement cost for both firms is $7,200. O If the government uses a uniform standard, the combined total abatement cost for both firms is none of the above.
In the cost-effective solution, Ax = 15 and Ay 15. In the cost-effective solution, Ax = 20 and Ay = 10. %3! In the cost-effective solution, Ax = 45 and Ay 15. O In the cost-effective solution, Ax = 22.5 and Ay = 7.5. O In the cost-effective solution, Ax = 30 and Ay = 0. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $15. O The total cost savings from implementing the cost-effective solution relative to a uniform standard is $112.50. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $120. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $450. The total cost savings from implementing the cost-effective solution relative to a uniform standard is none of the above. OA unit tax of $12.50 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $22.50 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $30 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $45 would achieve the standard of 30 total units of abatement from the two firms combined. OA unit tax of $60 would achieve the standard of 30 total units of abatement from the two firms combined.
Transcribed Image Text:In the cost-effective solution, Ax = 15 and Ay 15. In the cost-effective solution, Ax = 20 and Ay = 10. %3! In the cost-effective solution, Ax = 45 and Ay 15. O In the cost-effective solution, Ax = 22.5 and Ay = 7.5. O In the cost-effective solution, Ax = 30 and Ay = 0. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $15. O The total cost savings from implementing the cost-effective solution relative to a uniform standard is $112.50. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $120. The total cost savings from implementing the cost-effective solution relative to a uniform standard is $450. The total cost savings from implementing the cost-effective solution relative to a uniform standard is none of the above. OA unit tax of $12.50 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $22.50 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $30 would achieve the standard of 30 total units of abatement from the two firms combined. A unit tax of $45 would achieve the standard of 30 total units of abatement from the two firms combined. OA unit tax of $60 would achieve the standard of 30 total units of abatement from the two firms combined.
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