Use the following to answer questions :
Figure: City with Two Polluters
-(Figure: City with Two Polluters)Use Figure: City with Two Polluters.If the government imposed an emissions tax of $400,firm A would produce _____ tonnes of pollution and firm B would produce _____ tonnes of pollution.
A) 200;400
B) 400;1 200
C) 800;1 400
D) 1 200;1 600

Question

Use the following to answer questions :
Figure: City with Two Polluters 
-(Figure: City with Two Polluters)Use Figure: City with Two Polluters.If the government imposed an emissions tax of $400,firm A would produce _____ tonnes of pollution and firm B would produce _____ tonnes of pollution.
A) 200;400 
B) 400;1 200 
C) 800;1 400 
D) 1 200;1 600

Quizplus · Accepted Answer

An emissions tax of $400 would lead each firm to reduce pollution to the point where the marginal cost of abatement equals the tax. Firm A would produce 400 tonnes and Firm B would produce 1,200 tonnes of pollution.

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