Suppose that there are three power-generating plants,all of which generate emissions.The table summarizes the cost of emission reduction for each firm given five different levels of pollution: $$\begin{array} { l l l l l r }
\text { Tons of smoke emitted per day } & 4 & 3 & 2 & 1 & 0 \
\text { Total abatement cost, firm A } & 0 & \$ 14 & \$ 30 & \$ 50 & \$ 75 \
\text { Total abatement cost, firm B } & 0 & \$ 20 & \$ 45 & \$ 80 & \$ 120 \
\text { Total abatement cost, firm C } & 0 & \$ 25 & \$ 60 & \$ 100 & \$ 150
\end{array}$$
The least costly way of lowering smoke emissions from 12 tons to 9 tons would be for

Question

Suppose that there are three power-generating plants,all of which generate emissions.The table summarizes the cost of emission reduction for each firm given five different levels of pollution: $$\begin{array} { l l l l l r } 
\text { Tons of smoke emitted per day } & 4 & 3 & 2 & 1 & 0 \
\text { Total abatement cost, firm A } & 0 & \$ 14 & \$ 30 & \$ 50 & \$ 75 \
\text { Total abatement cost, firm B } & 0 & \$ 20 & \$ 45 & \$ 80 & \$ 120 \
\text { Total abatement cost, firm C } & 0 & \$ 25 & \$ 60 & \$ 100 & \$ 150
\end{array}$$
The least costly way of lowering smoke emissions from 12 tons to 9 tons would be for

Quizplus · Accepted Answer

To reduce emissions from 12 tons to 9 tons, a total reduction of 3 tons is needed. Since firm A has the lowest cost of abatement for reducing emissions by one ton, it is best for firm A to reduce its emissions by 1 ton. The remaining 2 tons of reduction can be split equally between firms B and C, with each reducing their emissions by 1 ton.

Therefore, the optimal emissions reduction is for firm A to emit 1 ton, and firms B and C to emit 4 tons each, which is option B. This results in a total abatement cost of $54 for the three firms, which is the lowest total cost compared to the other options.

Suppose That There Are Three Power-Generating Plants,all of Which Generate