How do you get this answer? The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp.and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200units). However, regulators have decided that the total amount of pollution in Springfield needsto be cut in half.CleanupMarginalCleanup CostMarginalCleanup CostLevel (A or B)ACMEBluth10203040222215102012301645225065306090457012065Suppose, instead, that regulators adopt pollution taxes. What tax level would guaranteethe same outcome?Answer: A tax of 45.01 would achieve the same amount of cleanup.

let's go through the process step by step.Step 1: Calculate the Marginal Cost of Abatement We'll…

Answered: The table below depicts the marginal…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 17SQ

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3. The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp. and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200 units). However, regulators have decided that the total amount of pollution in Springfield needs to be cut in half. Marginal Marginal Cleanup. Level (A or B) Cleanup Cost Cleanup Cost ACME Bluth 10 15 10 20 20 12 30 30 16 40 45 22 50 65 30 60 90 45 70 120 65 a) Suppose regulators adopt a command-and-control pollution standard that forces each firm to reduce pollution by the same amount, going from 100 units down to 50 units. What is the total cost of cleanup under this regulation? b) Suppose, instead, that regulators adopt pollution taxes. What tax level would guarantee the same outcome? Under the tax, how much pollution would each firm clean up? What is the total cost of cleanup under this regulation? How much tax revenue would the tax generate? c) If regulators were to implement cap-and-trade,…
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Cost of Reducing Pollution by 1 Unit $10 $20 $40 Above is tabulated the pollution level in tons for three different manufacturing firms, as well as their cost per ton of reducing pollution. The government has decided to limit total pollution to 300 tons, and distribute to each firm 100 permits, each allowing the firm to emit 1 ton of the pollutant. By how much would the total cost of the pollution reduction initiative be reduced if the firms are allowed to trade their permits, as opposed to not letting them trade them? Firm 1 2 3 Initial Pollution Level 100 200 300

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