The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.

-Refer to the scenario above. Suppose the government allocates 30 pollution permits to each company and the price of each permit is $1,500. Company ________ will spend ________on buying permits.

Question

The figure below shows the marginal pollution abatement cost curves of two firms- Company X and Company Y.
 
-Refer to the scenario above. Suppose the government allocates 30 pollution permits to each company and the price of each permit is $1,500. Company ________ will spend ________on buying permits.

Quizplus · Accepted Answer

Company Y will need to buy additional permits if it needs more than 30 permits. If it buys 10 more permits at $1,500 each, it will spend $15,000.

The Figure Below Shows the Marginal Pollution Abatement Cost Curves