Sulfur Dioxide Discharged (Tons) | Firm A | Firm B |
10 | $10,000 | $12,000 |
9 | 11,000 | 17,000 |
8 | 13,000 | 22,000 |
7 | 16,000 | 26,000 |
6 | 20,000 | 33,000 |
Table 16.4
Table 16.4 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. If Firm B wants to purchase a second permit to be able to discharge 10 tons of sulfur dioxide, what is Firm B's willingness to pay?
◦ $2,000
◦ $3,000
◦ $4,000
◦ $5,000