The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
FIGURE 17-5
-Refer to Figure 17-5.Suppose Firm 1 and Firm 2 are each abating Q 3 units of pollution.If the government imposes an emissions tax of $20 per unit of emissions,

Question

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
  FIGURE 17-5
-Refer to Figure 17-5.Suppose Firm 1 and Firm 2 are each abating Q 3 units of pollution.If the government imposes an emissions tax of $20 per unit of emissions,

Quizplus · Accepted Answer

The emissions tax will increase the marginal cost of pollution abatement for both firms. As a result, Firm 1 will abate less than Q3, and Firm 2 will not abate any pollution at all.

The Diagram Below Shows the Marginal Costs of Pollution Abatement