Aa · E: : | | T Heading 1 Heading 2 | 1 Normal Emphasis Paragraph 1. Suppose tha

Question

Aa · E: : | | T Heading 1 Heading 2 | 1 Normal Emphasis Paragraph 1. Suppose that there are two polluters in a society, with the marginal control costs (MCC) of sollutes A and Omega, respectively, to be MCC-30-3Xlpha bexe Xsinhe and Yooms represent the total amount of pollution from Alpha and Ormega, respectivly. a. What is the unregulated level of pollution for each polluter? b. Suppose Big Government determines that the optimal level of pollution for the society is 20 units. would be the most efficient allocation of the allowable pollution of 20 units between the two polluters your work and explain in words why your allocation is efficient. c. Given your answer to (b), what are the marginal control costs of Alpha and Omega? Proctorio is sharing your screen. Stop sharing

Explanation / Answer

a.
The unregulated level of pollution for Alpha is 30/3=10 and for Omega is 18.

b.
Xalpha + Xomega=20
Xalpha=20-XComega

MCCalpha=MCComega
30-3Xalpha=18-Xomega
30-3(20-XComega)=18-Xomega
30-60+3XComega=18-Xomega
3XComega+Xomega=18+30
4Xomega=48
Xomega=12

Xalpha=20-12=8

c.
MCCalpha=30-3Xalpha
=30-3(8)
=30-24
=6

MCComega=18-Xomega
=18-12
=6

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