Mushroom farms emit unpleasant odors that affect third parties. The marginal cost of the odors is MC = 4Q, where Q is the quantity of fumes emitted. Mushroom farmers can reduce odors by using various techniques and technologies; the marginal abatement cost is MAC = 1,200 - 36Q. The efficient quantity of odor emission is ____ fumes.
A) 20
B) 25
C) 30
D) 35

Question

Quizplus · Accepted Answer

The efficient quantity of odor emission is found where the marginal cost (MC) of the odors equals the marginal abatement cost (MAC). Setting MC = MAC gives 4Q = 1,200 - 36Q. Solving for Q, we get 40Q = 1,200, which simplifies to Q = 30.

Mushroom Farms Emit Unpleasant Odors That Affect Third Parties