Question

Draw a diagram of the marginal abatement cost curve for which the uncontrolled emission is 150...

Draw a diagram of the marginal abatement cost curve for which the uncontrolled emission is 150 tonnes per year, but it would be impossible to totally eliminate the emission.

Homework Answers

Answer #1

From the diagram below we can see that MAC is depicted on y-axis and amount of emissions on x-axis. Also initially emissions are at 150 tonnes per year. As emissions are reduced ( see direction of the arrow) the cost to reduce emissions rises steadily and becomes asymptotic to y-axis. This means that in order to reduce emissions to zero the cost keeps on increasing but never touches the y-axis. In other words,  it is technically impossible to cut emissions to zero as the MAC curve approaches infinity.

Note: There is no point on MAC curve that will ever touch y-axis even if the curve is stretched till infinity. (points on y-axis are those where x becomes 0)

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