The Cost of Controlling Emissions at a Firm Goes Up

question 95

Multiple Choice

The cost of controlling emissions at a firm goes up rapidly as the amount of emissions reduced goes up. Here is a possible model: where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost (in dollars) of this reduction. Government clean-air subsidies to the firm are based on the formula where q is again the reduction in emissions (in pounds per day) and S is the subsidy (in dollars) . Calculate the net cost function given the cost and subsidy above, and find the value of q that gives the lowest net cost. What is this lowest net cost?

• A)q = $2, N ( q )= $2,300
• B)q = $4, N ( q )= $2,300
• C)q = $2, N ( q )= $4,600
• D)q = $2.5, N ( q )= $2,375
• E)q = $2.5, N ( q )= $2,300

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Definitions:

R-charts

Control charts used in statistical process control to monitor the variability of a process based on samples of ranges.

Manual Calculations

Manual Calculations involve performing mathematical operations by hand without the aid of software or automated tools, often for the purpose of verifying computational accuracy.

Factory Floor

The operational area of a manufacturing plant or facility where goods are produced or assembled.

R-chart

A type of control chart used in quality control processes to monitor the range of variability of a manufacturing process over time.