Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below.
Suppose pollution is initially unregulated. If the City Council requires each firm to reduce emissions by 50 percent, then the total cost to society of this policy will be ________ per day.
A)$360
B)$380
C)$490
D)$870

Question

Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below.   
Suppose pollution is initially unregulated. If the City Council requires each firm to reduce emissions by 50 percent, then the total cost to society of this policy will be ________ per day.
A)$360 
B)$380 
C)$490 
D)$870

Quizplus · Accepted Answer

Both firms will have to move from process A to process C. As a result, Dirty Inc.'s cost will rise by $270 (from $110 to $380), and Filthy Inc.'s cost will rise by $90, from $400 to $490. So, the total cost to society of this policy will be $360.

Two Companies, Dirty Inc