Business, 28.11.2019 00:31 jcbballer

Two plants are emitting a uniformly mixed pollutant called gunk into the beautiful sky over tourist town. the city government decides it can tolerate total emissions of no more than 100 kg of gunk per day. plant g has marginal reduction costs of 100 - 4x and is currently polluting at a level of 25, while plant k has marginal reduction costs of 150 - y and currently pollutes at a level of 150 (x and y are the level of emissions at each plant).

1. what is the cost-effective pollution level for each plant if total pollution must equal 100? suppose the city government knows marginal reduction costs at the two plants. in this case, could the city obtain cost-effective pollution reduction using a cac approach? if so, how?

2. in reality, why might the city have a hard time getting this information?

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