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

question 4

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 .
-According to this model, if the government uses a uniform standard

• A) firm Y would face a marginal abatement cost that is higher than that for firm Y
• B) that standard would achieve a cost-effective solution
• C) firm Y should do more of the abating and firm X should do less to move closer to a cost-effective solution
• D) firm X's marginal abatement cost would be $48, and firm Y's marginal abatement cost would be $12

---

Definitions:

Leadership Approach

The methodology or style adopted by leaders or managers in guiding, directing, or influencing their team or organization.

Environment

The aggregate of surrounding things, conditions, or influences in which an organism or entity operates.

Budget Reports

Financial documents that detail the projected and actual income and expenditure over a particular period.

Risk Analysis

The process of identifying, assessing, and prioritizing risks to minimize, monitor, and control the impact of unfortunate events.