Suppose That Two Firms, X and Y, Face the Following

question 38

Multiple Choice

Suppose that two firms, X and Y, face the following abatement costs:
MAC_X = 1.2A_X, MAC_Y = 0.3A_Y
TAC_X = 0.6A_X² TAC_Y = 0.15A_Y²
Further assume that the combined abatement standard is 40 units for both firms. Use this information for any or all of Questions .
-The cost savings associated with the cost-effective solution relative to a uniform standard equals

• A) $300
• B) $108
• C) $10.8
• D) $9.60

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