The following table shows the marginal costs for each of the four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $ 54, and for Firm A to eliminate a second unit of pollution it would cost an additional$67. Refer to Table 10-5. Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8 pollution permits to achieve this goal. Which of the following is a likely auction price for the permits? a.$69b.$97c.$81d. 583 The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution fromtheir production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm Ato eliminate a second unit of pollution it would cost an additional $67.FirmO a. $69Ob. $97O c. $81O d. $83ABCDMarginal Cost to Eliminate(Dollars)First Unit Second Unit Third Unit Fourth Unit545754626768667382868291107108107111Refer to Table 10-5. Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8pollution permits to achieve this goal. Which of the following is a likely auction price of the permits?

Marginal cost is the additional cost incurred by the firms with every additional unit of pollution.…

Firm O a. $69 Ob. $97 O c. $81 O d. $83. A B C D Marginal Cost to Eliminate (Dollars) First Unit Second Unit Third Unit Fourth Unit 54 57 54 62 67 68 66 73 82 86 82 91 107 108 107 111 Refer to Table 10-5. Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8 ollution permits to achieve this goal. Which of the following is a likely auction price of the permits?

Firm O a. $69 Ob. $97 O c. $81 O d. $83. A B C D Marginal Cost to Eliminate (Dollars) First Unit Second Unit Third Unit Fourth Unit 54 57 54 62 67 68 66 73 82 86 82 91 107 108 107 111 Refer to Table 10-5. Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8 ollution permits to achieve this goal. Which of the following is a likely auction price of the permits?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 10PA

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