# Economics

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government will sell 40 pollution permits for \$75 each. It costs Firm A \$100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B \$50 for each ton of pollution that it eliminates before it reaches the river. Neither firm produces any less output, but they both conform to the law. It is likely that between the cost of permits and the cost of additional pollution abatement,

a. Firm A will spend \$4,500.

b. Firm B will spend \$3,500.

c. Firm B will spend \$3,000.

d. Firm A will spend \$4,000.

Currently very confused because I guessed/tried really hard to do the math and got that Firm A would spend \$4500 and Firm B would spend \$3000. They're both an option though so like.........???? Can anyone help?
I did 20 x 75 for both firms first, since there were only 40 permits; I assumed they would each get half (20). 75 comes from the cost of each permit.
Then, for firm A I multiplied the remaining tons (30) by the cost, \$100, and added the answer to 20 x 75.
Essentially did the same thing for firm B but 30(50) instead of 100.
Where did I go wrong? All insight welcome pls?

1. 0
2. 9
1. its me again. still dont know the answer!

posted by Camille

## Similar Questions

1. ### Econ MC

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river.
2. ### Science

a factor wants to build a big tank to store chemicals the tank will be near a river which of the following is a possible result of building the chemical tank a. the chemicals from the facility would not have any effect on the
3. ### Science

An environmental group claims that a local chemical plant is polluting a nearby river. They are calling for a shutdown of the chemical plant. What evidence would help you the most in evaluating their claim? A.A repeated study that
4. ### social studies

1.How have humans negatively impacted the water system of Arkansas? Select all that apply a.The construction of the MKARNS has resulted in more flooding. b.Chemicals and runoff from industry harm wildlife. c.Too much trade along
5. ### Math

Ventura Coal mined 6 ⅔ tons on Monday, 7 ¾ tons on Tuesday, and 4 ½ tons on Wednesday. If the goal is to mine 25 tons this week, how many more tons must be mined?
6. ### Math

Ventura Coal mined 6 ⅔ tons on Monday, 7 ¾ tons on Tuesday, and 4 ½ tons on Wednesday. If the goal is to mine 25 tons this week, how many more tons must be mined?
7. ### math

Ventura Coal mined 6 ¨ø tons on Monday, 7 ¨ú tons on Tuesday, and 4 ¨ö tons on Wednesday. If the goal is to mine 25 tons this week, how many more tons must be mined?
8. ### Finance

21. Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 60% probability that the firms will have a 15% return and a 40% probability that
9. ### English

1. He is in the river. [For example, half of his body is in the water. Or he is swimming in the river. He may be enjoying scub-diving in the river.] 2. He is on the river. [He is rowing a boat on the river. He is floating down on
10. ### Fluid Mechanics Physics

A flat-bottom river barge is 30.0 ft wide, 85.0 ft long, and 15.0 ft deep. (a) How many ft3 of water will it displace while the top stays 3.00 ft above the water? (b) What load in tons will the barge contain under these conditions

More Similar Questions