Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below. $$\begin{array} { | c | c | c | c | c | c | }
\hline \text { Process } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { (smoke/day) } & \text { (4 tons/day) } & \text { (3 tons/day) } & \text { (2 tons/day) } & \text { (1 ton/day) } & \text { (0ns/day) } \
\hline \text { Cost to Dirty Inc. (\$/day) } & \$ 110 & \$ 200 & \$ 380 & \$ 740 & \$ 1,460 \
\hline \text { Cost to Filthy Inc. (\$/day) } & \$ 400 & \$ 430 & \$ 490 & \$ 580 & \$700\
\hline
\end{array}$$ Suppose pollution is initially unregulated. If the City Council requires each firm to reduce emissions by 50 percent, then the total cost to society of this policy will be ______ per day.

Question

Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below. $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Process } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { (smoke/day) } & \text { (4 tons/day) } & \text { (3 tons/day) } & \text { (2 tons/day) } & \text { (1 ton/day) } & \text { (0ns/day) } \
\hline \text { Cost to Dirty Inc. (\$/day) } & \$ 110 & \$ 200 & \$ 380 & \$ 740 & \$ 1,460 \
\hline \text { Cost to Filthy Inc. (\$/day) } & \$ 400 & \$ 430 & \$ 490 & \$ 580 & \$700\
\hline
\end{array}$$ Suppose pollution is initially unregulated. If the City Council requires each firm to reduce emissions by 50 percent, then the total cost to society of this policy will be ______ per day.

Quizplus · Accepted Answer

The correct answer is A.The total cost to society of this policy is the sum of the costs to Dirty Inc. and Filthy Inc. of reducing emissions by 50 percent. Dirty Inc. can reduce emissions by 50 percent by switching from process A to process D, which will cost them $740 - $110 = $630 per day. Filthy Inc. can reduce emissions by 50 percent by switching from process A to process C, which will cost them $490 - $400 = $90 per day. Therefore, the total cost to society of this policy is $630 + $90 = $720 per day.

Two Companies, Dirty Inc Suppose Pollution Is Initially Unregulated