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

question 30

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 .
-Based on this model, if the government uses a uniform standard

• A) the total abatement cost for firm X is $24
• B) the total abatement cost for firm Y is $12
• C) the combined total abatement cost for both firms is $1,200
• D) the combined total abatement cost for both firms is $300

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Definitions:

Compound

A chemical substance made up of two or more elements chemically bonded together.

Compound

A substance made up of two or more elements chemically combined in fixed ratios.

Reaction

A process in which chemical substances interact, leading to the rearrangement of their atomic connectivity and the formation of different substances.

Compound

A substance formed from two or more elements that are chemically combined in fixed proportions.