Refer to the Figure Above

question 6

Multiple Choice

Refer to the Figure above. Assume that the firm is facing MAC₁ and that it has adjusted its permit holdings to e₁. What is the firm's incentive to engage in R&D to reduce abatement costs to MAC₂?

• A) (a+b)
• B) (a+c)
• C) (a+b+c)
• D) (a+b+c+d)

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Definitions:

Square Root

A value that, when multiplied by itself, gives the original number, denoted as √.

Cube Root

The cube root of a number is a value that, when multiplied by itself three times, gives the original number.

Rationalize Denominator

The process of eliminating a radical from the denominator of a fraction by multiplying both the numerator and the denominator by an appropriate quantity.

Rationalize Denominator

The process of eliminating a root from the denominator of a fraction.