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Author Question: The diagram below shows the marginal cost of abatement for each of two firms, A and B. Each firm is ... (Read 66 times)

petersan

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on: Oct 12, 2022

The diagram below shows the marginal cost of abatement for each of two firms, A and B. Each firm is initially abating Q0 units of pollution.



FIGURE 17-8

Refer to Figure 17-8. Suppose a system of tradable pollution permits is introduced into this market and the equilibrium permit price is p*. Firm A will sell permits to Firm B because


◦ the revenue Firm A earns from selling permits (areas 5 + 6) is greater than the cost it incurs from abating more pollution (area 6).
◦ Firm A can buy the permits at a lower price than Firm B.
◦ Firm A's total cost of abating more pollution (area 6) is less than the revenue it earns from selling the permits (area 4 + 5).
◦ Firm A's total cost of abating more pollution (areas 5 + 6) is less than the revenue it earns from selling the permits (areas 4 + 5 + 6).
◦ Firm B has lower costs of pollution abatement than Firm A.
Microeconomics ¦ Ragan ¦ 17th Edition
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Marked as best answer by petersan on Oct 12, 2022

hiyayyay

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Reply #1 on: Oct 12, 2022
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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petersan

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Reply 2 on: Oct 12, 2022
Thanks for the timely response, appreciate it

daiying98

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Reply 3 on: Yesterday
Wow, this really help

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