The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.

-Refer to the figure above. If the government sets a pollution cap of 200 tons of emission, Beta Inc. will incur an abatement cost of ________.

Question

The figure below shows the marginal pollution abatement costs of two companies - Alpha Electric and Beta Inc.
 
-Refer to the figure above. If the government sets a pollution cap of 200 tons of emission, Beta Inc. will incur an abatement cost of ________.

Quizplus · Accepted Answer

Beta Inc. will incur an abatement cost of 100 tons because with a pollution cap of 200 tons, they need to reduce their emissions from their current level of 300 tons (as implied by the need for abatement) down to 200 tons, which is a reduction of 100 tons.

The Figure Below Shows the Marginal Pollution Abatement Costs of Two