Imagine a firm with a marginal abatement cost ( MAC) function equal to: MAC = 70 - 10E. The government introduces a cap-and-trade policy and grandfathers the firm 5 permits initially. Assuming the market price of permits is $10, the firm will spend a total of $____ in order to buy permits. (Note: your answer can be positive or negative; if it is positive, the firm buys permits and your answer represents the firm's total expenditures on permits; if it is negative, the firm sells permits and your answer represents the firm's total revenues from selling permits).
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- 1. A firm's marginal abatement cost function is given by MAC = 200-5E. Suppose that, after adopting new abatement technology, the firms marginal abatement function becomes MAC = 160-4E. Costs are in dollars per tonne and emissions are in tonnes per year. The firm is given %3D 20 tradeable pollution permits (each permit allows it to emit one tonne of pollution) and the current market price per permit is $100. a)Given no change in the permit price how many tonnes of pollution will the firm emit? b)What will be the firms total abatement cost? Will it buy or sell permits and how many? c) What will be the net cost to the firm after trading? What will be the net gain to the firm from adopting the new abatement technology3) A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q. and can distribute the chemical at marketing marginal costs of MC = 1. The demand for His given by P = 30-1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 00 units 4 units 05 units 07 units 10 unitspik Schiel 0 ( QR Q2 MC2 FIRMI permits метро Firma shing p* > MC₂ will abate QA sell. Wilfrid I permet
- Will a system of marketable permits work with thousands of films? Why or why not?As a result of globalization and new information and communications technology, would you expect that the definitions of markets that antitrust authorities use will become broader or narrower?Economics An incumbent firm, Firm 1, faces a potential entrant, Firm 2, with a lower marginal cost LOADING... . The market demand curve LOADING... is p=220−q1−q2. Firm 1 has a constant marginal cost of $40 per unit, while Firm 2's is $10. Part 2 To block entry, the incumbent appeals to the government to require that the entrant incur extra costs. Part 3 Suppose that the legal intervention imposed by the government leaves the marginal cost alone (at $10 for Firm 2) but imposes a fixed cost. What is the minimal fixed cost that will prevent entry? Part 4 The minimum fixed cost (F) that will deter entry is F=$enter your response here.
- A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, what level of emissions does the firm choose under the tax? A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, how many units did the firm abate relative to the unregulated environment?2. The total cost (in thousands of pesos) of producing x HDTVS is C(x) = 50, 000 + 1,000x- -0.5a2 a. Find the cost of producing the 101st HDTV. b. Use the marginal cost to approximate the cost of producing the 101st HDTV. 3. Suppose that for a company producing r face shields per week, the cost (C) and revenue (R) functions are given by C(x) = 5,000 + 2x and R(x) at the rate of 500 face shields per week when production is 2000 face shields per week, find the rate of increase in the profit.(Hint: Profit is revenue minus cost) = 10x – 0.001x2, respectively. If production is increasingThe table below shows current carbon emissions and the cost of reducing carbon emissions for three industrial firms. The government introduces a cap-and-trade policy to regulate carbon emissions. The total cap on emissions is 180 tonnes of carbon, and each firm receives an initial allocation of tradable permits for 60 tonnes of carbon emissions. Current carbon emissions Firm A B C (tonnes) 80 100 70 a. Firm A will buy 40 emission ✓ Firm C. Cost of reducing emissions by 1 ton ($) 150 200 50 Firm B will sell 20 emissior Firm C. Instructions: Round your answer to the nearest whole number. b. To break even, the selling firm must receive $ 150
- cap-and-trade and windfall profitsA city called Seoul is suffering from high concentrations of mercury in the air, caused by burningcoal in power plants. There are two of these plants close to the city. The city’s mayor wants touse cap-and-trade to reduce emissions to a reportedly “safe” level of 60 tons. The two firms havethe following marginal benefits of emissions: MB1 = 100 – 2e1, MB2 = 25 – 0.5e2.a. How much mercury will each firm emit? What allowance price will prevail in themarket?Firm 2 hires a smart lobbyist who convinces the government that its profits are relatively low andthat it therefore deserves a generous allowance allocation. The government agrees and allocatesa1 = 20 allowances to firm 1 (for free) and a2 = 40 allowances to firm 2 (for free).b. What are the firms’ profits? Do any of the firms earn windfall profits? [Hint: compareprofits with and without regulation.] Windfall profits have been sharply criticized by consumer advocacy groups and politicians.c. What can…Please help me with this problem. Thank you!You are managing sports apparel sales. The way contracts are writlen, you purchase the rights to buy a fixed block of copyrighted materials for a negotiated price for a given yoar. You then sell these materials through your channels and try to make the moat possible. Apparel sales are automated through online channels so the additional cost of selling a given unit is negligible. In other words, the cost structure is relatively fixed no matter how many units you sell. What is an aporopriate optimization target for this type of cost structure and what will elasticity equal if you optimize prices well?