The super powerful expert Hand written solution is not allowed No answer from Chat GPT please Consider a firm with a marginal abatement cost (MAC)function given by MAC = 27-3E Suppose that thegovernment implements a per-unit tax on emissions of$6. Under this tax, what will be the firm's totalcompliance costs? (Hint: recall that total compliancecosts are equal to the sum of total abatement costs andtax payment.) Please round your final answer to twodecimal places if necessary. (42 is not the right answeraccording to my Prof.)

Answered: Image /qna-images/answer/e3e6e80f-7c52-4dd2-803e-b7015ee257a6.jpg

Answered: Consider a firm with a marginal…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Problem 1QTC

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Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 27-3E. The government introduces a per-unit tax on emissions equal to $6. For a profit-maximizing firm, total compliance costs (total abatement costs plus tax payment) are $ Answer:
Assume an emissions tax is set at t as in the figure above. How many units does Firm 2 abate under the tax?
Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 120 10E. The government introduces a per-unit tax on emissions equal to $20. For a profit- maximizing firm, total compliance costs (total abatement costs plus tax payment) are $
Please no written by hand solution A firm's profit function is: π(x,y) = 96x - 6x^2 + 84y - y^2 - 2xy .Suppose the firm's production causes pollution and the local authorities decide to apply a tas on its production, T=t(x+y), where t is a parameter. Given the tax, the firm maximises their tax revenue. What is the maximum profit the firm can obtain? What is the demand elasticity of price for each commodity at their maximum point?
Suppose a power generating plant emits particulates that damage crops and affect human health. The relationship between emissions and environmental damage is represented by the marginal damage function, MD=9e where e represents tons of emissions per month. The cost to the firm (and society) of eliminating emissions is represented the marginal abatement cost function, MAC=108.5 - 6.5e Both MD and MAC are dollar costs per month. If the power generating firm were allowed to ignore the social cost of its emissions, what would be the firm’s monthly emission level? Calculate the socially efficient level of pollution. If the emissions calculated in part B is a level found to shorten some people’s lives, could it still be considered socially efficient? Suppose the EPA set an emission standard at the socially efficient level calculated in part B. Calculate the cost to the firm of achieving this standard. Suppose that instead of a standard, the EPA charged an emissions tax. The tax is set at…
Many economists favor a carbon tax as a way to discourage carbon emissions. Suppose such a tax were to be set at $20 per metric ton of carbon emissions (1 metric ton = 1,000 kilograms). Consider a 35% efficient coal-fired powerplant that produces 50MW of electricity. Given the carbon intensity of coal is 24gC/MJ, answer the following: a) What would the annual carbon tax be for this powerplant? Answer: $2.16 million/year b) A tree farm sequesters carbon at the rate of 5,000kg per year per acre over the 40-year life of the farm. What area of forest (in acres) would have to be planted to “offset” the powerplant’s emissions over the next 40 years (roughly the lifetime of the powerplant)? Answer: 21,600 acres c) How much could the powerplant operators pay for the forestry project (in $/acre-year) and still have it be cheaper than paying the $20 per metric ton carbon tax? Answer: $100/acre-year
Suppose a tax is set at t’ in the figure. How many units of emissions are ABATED and is abatement achieved cost effectively? Suppose a regulation has just been implemented requiring that coal-fired power plants pay a tax of $80 on each unit of emissions (1 unit is 1 metric ton). Before the tax was imposed, a plant called Old River Power had an emissions level of 100 units. Given a marginal abatement cost function of 200 – 2E, under the tax policy what will Old River Power pay the regulator in emissions taxes?
A company's marginal costs for emission reduction (MAC) can be expressed as MAC = 2A, where A is abatement in tonnes. MAC is expressed in USD. Assume that the company's total emissions inthe starting position is 100 tons. a) Assume that the authorities now decide on a limit value which means that the company may not emit more than 30 tonnes. What is the total cost for the company to live up to this limit? b) A research team consisting of both ecologists and economists concludes that the marginal benefit (per tonne) of reducing emissions is constant and equal to USD 100. How high is the socio-economically optimal level of emissions (for the individual company) given thisinformation? c) Assume that a system for trading in emission rights is established. The company in question is allocated 30 emission rights (where each right corresponds to one tonne). If the price of emission rights is USD 120 (per tonne), will the company be a buyer or a seller of emission rights and if so, how many…
Suppose there are two power plants that release sulfur dioxide (SO2) into air at their current production levels. Each firm currently emits 75 tons per year, thus emitting 150 tons total. Local authorities have decided they would like to reduce annual SO2 pollution to 100 tons per year (thus a 50 ton reduction). The power plants have different marginal abatement costs given by the following equations: MAC1 = 3q1 + 5 MAC2 = 2q2 (a) Suppose the local authorities decide to impose a uniform reduction of pollution by both power plants. In order to achieve the 50 unit reduction under this plan, both plants must reduce their emissions (abate pollution) by 25 units each. Find the total cost of abatement under this uniform reduction policy. (b) Find the efficient abatement amount for each power plant if you wanted to achieve the 50 unit reduction at the most cost-efficient way possible (i.e. find the q1 and q2 that achieves the 50 unit reduction in the cheapest way). What is the total cost of…
A company manufactures and sells x television sets per month. The monthly cost and price-demand equations are C(x)=74,000+40x and p(x)=250−x/20 0 ≤ x ≤ 5000. (A) Find the maximum revenue. (B) Find the maximum profit, the production level that will realize the maximum profit, and the price the company should charge for each television set. (C) If the government decides to tax the company $4 for each set it produces, how many sets should the company manufacture each month to maximize its profit? What is the maximum profit? What should the company charge for each set?
There are two polluters in an industry with the following cost functions: MAC1 = 182 - 0.14E1 MAC2 = 144 - 0.06E2 The government establishes a tradable pollution permit system and gives each polluter 800 permits (1600 permits in total). What will be the net gain for Polluter 1 from the trade?
Suppose there are pulp and paper mills that release carbon dioxide emissions (CO₂) into air at their current production levels. Each firm currently emits 10 tons per year, thus emitting 20 tons total. Local authorities have decided they would like to reduce annual CO₂ pollution to 10 tons per year (thus a 10 ton reduction) via a cap-and-trade policy. The mills have different marginal abatement costs given by the following equations: MACX = 3ax MACY = ay whereby ax and ay correspond to the marginal abatement quantities chosen by firms X and Y respectively. (a) Plot the marginal abatement functions for each firm on one overlapping graph that rep- resents all the possible combinations of achieving a 10 unit total abatement (b) If the regulators issue each firm 5 permits, what is the least firm Y would accept to sell one permit? What is the most firm X would be willing to pay to buy one permit? Given this information, do you expect firms would trade? (c) If the regulators issue each firm 5…

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