Answer: To determine the number of tons of sulfur dioxide the company will abate and emit, we need to compare the pollution tax with the marginal cost of abatement for each ton. The company will abate up to the point where the marginal cost of abatement is equal to or lower than the pollution tax.
Looking at the table, we can see that the marginal cost of abatement increases as more tons are abated:
- Quantity Abated (tons) 1 2 3 4 5 6 7 8 9
- Marginal Cost of Abatement per Ton $5,000 $8,000 $15,000 $20,000 $30,000 $42,000 $56,000 $80,000 $135,000
The pollution tax imposed by the government is $55,000 per ton of sulfur dioxide emitted. Therefore, the company will abate up to the point where the marginal cost of abatement is less than or equal to the pollution tax.
From the table, we can see that the marginal cost of abatement for 7 tons of sulfur dioxide is $56,000. Since this cost is greater than the pollution tax of $55,000, the company will abate up to 6 tons of sulfur dioxide.
Thus, the company will abate 6 tons of sulfur dioxide and emit 3 tons of sulfur dioxide (9 tons emitted - 6 tons abated).
In summary, the company will abate 6 tons of sulfur dioxide and emit 3 tons of sulfur dioxide when the government imposes a pollution tax of $55,000 per ton of sulfur dioxide emitted.
Step-by-step explanation: