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)

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Emissions (tons/month) Marginal Abatement Cost Total Abatement Cost Total Subsidy at $150/ton Total tax bill at...
Emissions (tons/month) Marginal Abatement Cost Total Abatement Cost Total Subsidy at $150/ton Total tax bill at $150/ton Total Costs 10 0 0 9 15 15 8 30 45 7 50 95 6 70 165 5 95 260 4 120 380 3 150 530 2 185 715 1 230 945 0 290 1,235 50. What optimal level of emissions would the above firm choose given the subsidy level detailed above? 51. If the above firm emits the optimal level of emissions...
A fishery and a Chemical Company are both operating on the river. Marginal Abatement Cost is...
A fishery and a Chemical Company are both operating on the river. Marginal Abatement Cost is MAC = 90 – E and Marginal Damages is MD = 30 + 2E, where E is measured in tonnes. 19) Suppose the Chemical Company owns the river. Begin by assuming there has not been any agreement. The Fishery offers the Chemical Company $50 per tonne of abatement, and the Chemical Company agrees. What will be resulting Net Social Benefit (NSB) of the agreement?...
Suppose a society has the following marginal abatement cost (MAC) and marginal damage (MD) functions MAC...
Suppose a society has the following marginal abatement cost (MAC) and marginal damage (MD) functions MAC = 140 – 4E MD = 3E Where E denotes the level of pollution. a) What is the unregulated level of pollution? b) What is the optimal level of pollution? Sketch the MAC and MD functions and show the optimal level of pollution in the diagram. c) Find the per-unit pollution tax that would achieve the optimal level of pollution. Show the level of...
Suppose the marginal cost of abatement for a airborne pollutant is MC= 4X, where X is...
Suppose the marginal cost of abatement for a airborne pollutant is MC= 4X, where X is measured in tons, and the marginal benefit of abatement is 500 - X. The maximum abatement (reducing pollution to zero) is XMAX= 500. a) Graph the MC and MB curves and show the efficienct level of abatement X* on the graph. b) Calculate the efficient level of abatement X* c) Suppose there is no abatement (X=0, which implies no actions are made to remove...
Consider a "market for pollution'' where the marginal abatement cost is given by ???(?)=300−2?MAC(e)=300−2e and the...
Consider a "market for pollution'' where the marginal abatement cost is given by ???(?)=300−2?MAC(e)=300−2e and the marginal social cost of emissions is constant at $20$20 per tonnes of emissions. ?e is measured in tons of emissions. a) (4) What would be the unregulated market amount of emissions? b) (4) What is the socially efficient amount of emissions? c) (3) Compute the deadweight loss from the unregulated emissions externality. d) (4) Give two policies, implied by this model, that can generate...
Suppose a control authority is trying to design a cost-effective pollution control policy. They assume the...
Suppose a control authority is trying to design a cost-effective pollution control policy. They assume the aggregate marginal abatement cost is given as MAC = 16 –q and the marginal pollution damage is given as MD = 3q where q is the total amount of emissions. Calculate the socially efficient level of emissions. Use a diagram to explain why the profit-maximising level of emissions and socially efficient level of emissions are different. Suppose the control authority tries to achieve the...
Fuel selection for electricity generation 1. Uncontrolled emission factors and heating value data for bituminous coal,...
Fuel selection for electricity generation 1. Uncontrolled emission factors and heating value data for bituminous coal, residual fuel oil and natural gas burned in utility boilers are given in Table 1. Consider a thermal electric power plant that generates an average of 400 MW of electricity with an overall efficiency of 35%. Determine for each fuel the annual uncontrolled mass of each of the pollutants (in units of metric tonnes per year) that would be emitted from such a power...
Draw a diagram illustrating the marginal cost, average variable cost, and average fixed cost curves for...
Draw a diagram illustrating the marginal cost, average variable cost, and average fixed cost curves for a firm. Suppose there is a decrease in weekly wages paid by the firm. On your diagram demonstrate the impact of this event on these cost curves.
Consider a good for which production generates external costs. Let the marginal external cost function be...
Consider a good for which production generates external costs. Let the marginal external cost function be MEC=aE, where a is 8, and E the quantity of emissions. The pollution can be abated at a cost. Let the marginal cost of abatement function be MCA=B-cE, where B is 26 and c is 3. a) Find the socially optimal level of emissions, and the optimal value of abatement costs and external costs. b) If an emission fee were levied on producers, what...
Draw the marginal cost (MC) curve for a typical firm. Why does MC eventually increase? Explain...
Draw the marginal cost (MC) curve for a typical firm. Why does MC eventually increase? Explain fully. Where is MPL maximized along the MC curve? Why? Marginal cost is the slope of which function?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT