Question

The paper industry and brewery industry each emit 60 tons of particles into the air. It costs the paper industry $1,000 to remove 1 ton of particulates, and it costs the brewery industry $1,400 to remove 1 ton of particles. In an effort to reduce particulate pollution, the government gives each industry tradable allowances worth 50 tons of particulates. We would expect that:

Answer 1

Answer/ Explanation:

it will cost the paper industry $60000 to remove 60 ton of particulate anad it will cost the brewery company $84000 to remove 60 ton of particulate.

Now considering that the government has given both of them tradable allowance of 50 tons, the paper company not have to only use $50000 to remove the particulate leaving them with an excess of $10 While the brewery company will be spending $70000 which still leave the brewery on the high side. So what we assume is that the brewery company will purchase excess tradable allowances from the paper industry at a cost within the range of 1000 dollars to 1400 dollars per tradable allowance.