Two Firms Can Choose from Five Different Technologies to Reduce

question 54

Multiple Choice

Two firms can choose from five different technologies to reduce their pollution: A,B,C,D andE.The amount of pollution emitted by each technology and the cost of the technologies are shown in the table.Both firms have adopted technology A and currently emit 4 tons apiece.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted.
$$\begin{array} { l c c c c c } & \mathrm { A } : & \mathrm { B } : & \mathrm { C } : & \mathrm { D } : & \mathrm { E } : \\& 4 \text { tons } & 3 \text { tons } & 2 \text { tons } & 1 \text { ton } & \text { no pollution } \\\text { Industrio } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1000 \\\text { Capitalista } & \$ 225 & \$ 250 & \$ 290 & \$ 400 & \$ 600\end{array}$$
The ultimate equilibrium price of six permits is __________ with Industrio buying __________ and Capitalista buying __________.

• A)$100;3;3
• B)$110;2;4
• C)$50;4;2
• D)$300;3;3

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