Multiple Choice
Refer to the figure above.The firm is facing an emissions charge of t and an abatement cost curve of MAC1.If the firm is able to lower its abatement cost curve to MAC2, and it now faces an emissions standard of e1, the firm will
A) emit at level e1 and save (d+e)
B) emit at level e1 and save (d)
C) emit at level e2 and save (c+d)
Correct Answer:
Verified
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