I know the answer to this is 83, but I have no idea how to do this question. Can you help give me an explanation why? Thank you!
Refer to Table 105. If the government wanted to reduce pollution from 16 units to 6 units, which of the following fees per unit of pollution would achieve that goal?
Table 105


Refer to Table 105. If the government wanted to reduce pollution from 16 units to 6 units, which of the following fees per unit of pollution would achieve that goal?







Let us do this step by step:
SInce number of units of pollution have to be reduced from 16 to 6, total reduction = 16  6 = 10 units
Now the table gives us the marginal cost of reducing pollution by 1 unit. A firm will reduce pollution if the marginal cost of reducing pollution is less than the fees charge per unit of pollution.
If fees is (a) 67, A reduces 2 units, B reduces 1 unit, C reduced 2 units and D reduces 1 unit. Total reduction = 6<10
If fees is (b) 68, A reduces 2 units, B reduces 2 unit, C reduced 2 units and D reduces 1 unit. Total reduction = 7<10
If fees is (c) 81, A reduces 2 units, B reduces 2 unit, C reduced 2 units and D reduces 2 unit. Total reduction = 8<10
If fees is (d) 83, A reduces 3 units, B reduces 2 unit, C reduced 3 units and D reduces 2 unit. Total reduction = 10
Thus, the required reduction is achieved at a fee of (d) $83
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