Refer to the table above. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are not allowed to trade permits, what is the total cost of the pollution reduction?
Answer : option A)
since no trading of permits are allowed
so,both reduces pollution units by 2,
TC for A = 20, TC for B = 40
total cost of pollution reduction = 20+40 = 60
Refer to the table above. Suppose the government wants to reduce the total amount of pollution...
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