Question

Two firms release some pollutants into the air. Their marginal abatement cost functions are given below where emissions are in hundreds of units per week. Social efficiency requires that total emissions be reduced by 75 units per week.

MACₐ = 300 – 6Eₐ MACᵦ = 400 – 2Eᵦ
Graph the MAC functions in separate diagrams.

Answer 1

The question is about graphing MAC functions in economics, which represent costs incurred by firms to reduce pollution.

Step-by-step explanation:

The given question is related to the concept of marginal abatement cost (MAC) functions in economics. The MAC functions represent the cost that firms incur to reduce pollution. The first MAC function is MACₐ = 300 – 6Eₐ, and the second MAC function is MACᵦ = 400 – 2Eᵦ. These functions show that as emissions decrease, the cost of reducing pollution increases.

To graph the MAC functions, we can plot the emissions (E) on the x-axis and the MAC on the y-axis for each firm. Separate diagrams are used for each MAC function.

For example, if we want to graph MACₐ, we can choose different values for Eₐ, calculate the corresponding MAC values using the MACₐ function, and plot the points on the graph. We repeat this process for different values of Eₐ to get a complete MACₐ graph.