Two Firms, Acme and FirmCo, Have Access to Five Production

question 67

Multiple Choice

Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. $\begin{array}{|c|c|c|c|c|c|}\hline \text { Process } & \text { A } & \text { B } & \text { D } & \text { D } \\\hline \text { (smoke/day) } & \text { (10 tons/day) } & \text { (8 tons/day) } & \text { (6 tons/day) } & \text { (4 tons/day) } & \text { (2 tons/day) } \\\hline \text { Cost to Acme (\$/day) } & \$ 750 & \$ 800 & \$ 1,000 & \$ 1,400 & \$ 2,000 \\\hline \text { Cost to FirmCo (\$/day) } & \$ 500 & \$ 750 & \$ 1,200 & \$ 2,200 & \$ 4,000 \\\hline\end{array}$
Suppose the firms are both currently using process A. If the government imposes a tax of $110 per ton of smoke emitted, a total of ______ tons of smoke will be emitted each day, and the total cost to society of this policy will be ______ per day.

• A)14; $500
• B)16; $250
• C)18; $50
• D)20; $0

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