Two firms can choose from five different technologies to reduce their pollution: A,B,C,D and E.The amount of pollution emitted by each technology and the cost of the technologies are shown in the table.Both firms have adopted technology A and currently emit 4 tons apiece.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted.
$\begin{array}{lccccc}
& \text { A: } & \text { B: } & \text { C: } & \text { D: } & \text { E: } \
& 4 \text { tons } & 3 \text { tons } & 2 \text { tons } & 1 \text { ton } & \text { no pollution } \
\text { Industrio } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1000 \
\text { Capitalista } & \$ 225 & \$ 250 & \$ 290 & \$ 400 & \$ 600
\end{array}$
A government regulation that requires both firms to reduce pollution by 50% results in process ___________ being adopted and the private costs are __________.

Question

Two firms can choose from five different technologies to reduce their pollution: A,B,C,D and E.The amount of pollution emitted by each technology and the cost of the technologies are shown in the table.Both firms have adopted technology A and currently emit 4 tons apiece.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted.
$\begin{array}{lccccc} 
& \text { A: } & \text { B: } & \text { C: } & \text { D: } & \text { E: } \
& 4 \text { tons } & 3 \text { tons } & 2 \text { tons } & 1 \text { ton } & \text { no pollution } \
\text { Industrio } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1000 \
\text { Capitalista } & \$ 225 & \$ 250 & \$ 290 & \$ 400 & \$ 600
\end{array}$
A government regulation that requires both firms to reduce pollution by 50% results in process ___________ being adopted and the private costs are __________.

Quizplus · Accepted Answer

The government regulation requires both firms to reduce pollution by 50%, which means they must emit no more than 2 tons each. Technology C is the only technology that allows both firms to meet this requirement, and it costs $500 per firm. Therefore, the private costs are $790.

Two Firms Can Choose from Five Different Technologies to Reduce