The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution. $$\begin{array} { | c | c | c | c | }
\hline \text { Firm } & \begin{array} { c }
\text { Total Discharge (in } \
\text { tons) }
\end{array} & \begin{array} { c }
\text { Marginal Cost of } \
\text { Cleanup } \
\text { (per tan) }
\end{array} & \begin{array} { c }
\text { Total Cost of } \
\text { Cleanup }
\end{array} \
\hline \text { A } & 60 & \$ 5.00 & \$ 300 \
\hline \text { B } & 70 & \$ 8.00 & \$ 560 \
\hline \text { C } & 80 & \$ 7.50 & \$ 600 \
\hline \text { D } & 90 & \$ 4.00 & \$ 360 \
\hline
\end{array}$$ The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes. If the government establishes a regulation requiring each company to reduce pollution by 50 percent, what will be spent on reducing pollution?

Question

The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution. $$\begin{array} { | c | c | c | c | } 
\hline \text { Firm } & \begin{array} { c } 
\text { Total Discharge (in } \
\text { tons) }
\end{array} & \begin{array} { c } 
\text { Marginal Cost of } \
\text { Cleanup } \
\text { (per tan) }
\end{array} & \begin{array} { c } 
\text { Total Cost of } \
\text { Cleanup }
\end{array} \
\hline \text { A } & 60 & \$ 5.00 & \$ 300 \
\hline \text { B } & 70 & \$ 8.00 & \$ 560 \
\hline \text { C } & 80 & \$ 7.50 & \$ 600 \
\hline \text { D } & 90 & \$ 4.00 & \$ 360 \
\hline
\end{array}$$ The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes. If the government establishes a regulation requiring each company to reduce pollution by 50 percent, what will be spent on reducing pollution?

Quizplus · Accepted Answer

To calculate the total spent on reducing pollution by 50% for each company, we find half of the total discharge for each and then multiply by the marginal cost of cleanup per ton. For each firm: - A: $60 \times 0.5 \times \$5.00 = \$150$ - B: $70 \times 0.5 \times \$8.00 = \$280$ - C: $80 \times 0.5 \times \$7.50 = \$300$ - D: $90 \times 0.5 \times \$4.00 = \$180$ Adding these amounts gives a total of \$910 spent on reducing pollution.

The Following Table Shows Four Firms, the Amount Each Pollutes