Question

Suppose there are two ways to reduce water pollution in a river. Society needs to remove 150 units of pollution (q). The marginal cost of the first method is 2q1. The marginal cost of the second method is 3q2. Society wants to use the most cost-effective way to reduce water pollution. How many units of pollution should be removed using the first method? (Round your answer to two decimal places.)

Answer 1

Answer:

For most effective way to reduce pollution units of pollution to be removed using first method should be where Marginal cost of first method is equal to marginal cost of second method.

Total units to be removed is 150. If q₁ units are removed using first method then (150-q₁) units will be removed using second method.

Putting all these facts in form of equation we get

2q₁=3(150-q₁) or 2q₁=450-3q₁ or 5q₁=450 or q₁=90.

90 units of pollution should be removed using first method.