Refer to the Information in Figure 16

question 133

Multiple Choice

Refer to the information in Figure 16.5 below to answer the question(s) that follow. Figure 16.5
Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.
-Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, Alpha will reduce its emissions to ________ tons.

• A) 25
• B) 50
• C) 75
• D) 100

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Definitions:

Net Operating Income

A measure of a company's profitability from its core business operations, excluding deductions for interest and taxes.

Planning Budget

A financial plan that estimates the revenue and expenses for a future period, typically created to guide a business in achieving its financial goals and objectives.

Wells Serviced

Wells Serviced refers to the number of oil, gas, or water wells that have undergone maintenance, repair, or installation services within a given timeframe.

Total Variable Cost

The sum of all variable expenses that change in proportion with the level of production or business activity.