Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.
Suppose the government imposes a tax of $21 on each ton of smoke emitted. To minimize costs, Firm X will emit ________ tons; Firm Y will emit ________ tons, and Firm Z will emit ________ tons.
A)1; 2; 3
B)2; 3; 4
C)3; 4; 4
D)1; 2; 4

Question

Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.   
Suppose the government imposes a tax of $21 on each ton of smoke emitted. To minimize costs, Firm X will emit ________ tons; Firm Y will emit ________ tons, and Firm Z will emit ________ tons.
A)1; 2; 3 
B)2; 3; 4 
C)3; 4; 4 
D)1; 2; 4

Quizplus · Accepted Answer

With a tax of $21 on each ton of smoke emitted, each firm will reduce emissions if the marginal cost of reducing emissions by one ton is less than $21.

Suppose There Are Three Power-Generating Plants, Each of Which Has