Question

two firms, A and B, each currently emit 100 tons of chemicals into the air. THe government has decided to reuce the pollution and from now on will require

Answer 1

Option A = 20 fewer tons of pollution into the air, and Firm B will emit 100 fewer tons of pollution into the air.

Step-by-step explanation:

The information or data required to decode or solve the above Question is given below;

(1). "It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air."

DEDUCTION: We can see that Firm A in (1) above uses more money that is $200 than firm B which is $100 to eliminate each ton of pollution.

(2). "Both firms, A and B, each currently emit 100 tons of chemicals into the air."

DEDUCTION: Both firms emit the same amount of pollution.

(3)." The government gives each firm 40 pollution permits, which it can either use or sell to the other firm"

So, from (1) we can deduce that A is more likely to buy the 40 pollution permit of B to make firm A to be 40 + 40 = 80 pollution permit.

Thus, A will emit 20 fewer tons of pollution while B will emit 100 tons.