The diagram below shows the marginal cost of pollution abatement for two firms, Firm X and Firm Y.
FIGURE 17-6
Refer to Figure 17-6. There is an emissions tax of $t per unit of pollution. Which of the following statements regarding the pollution abatement activities by the two firms is correct?
◦ The emissions tax causes an optimal level of pollution.
◦ It is efficient for Firm Y to do less pollution abatement than Firm X because Firm Y faces higher costs of abatement.
◦ It is not socially optimal to have Firm X doing pollution abatement of
QX while Firm Y does the lesser amount,
QY.
◦ The emissions tax causes no change in the firms' polluting activity.
◦ The shaded areas in the two graphs depict the social costs of pollution caused by Firms X and Y.
Brain Diagram
Sequential decline of whale catches in the Antarctic shows the strong effect of human predators.
Energy Level Diagram of Hydrogen
Anatomy diagram
Diagram of a cell
Economic objectives of firms