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The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp. and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200 units). However, regulators have decided that the total amount of pollution in Springfield needs to be cut in half. Cleanup Marginal Cleanup Cost Marginal Cleanup Cost Level (A or B) ACME Bluth 10 20 30 40 2222 15 10 20 12 30 16 45 22 50 65 30 60 90 45 70 120 65 Suppose, instead, that regulators adopt pollution taxes. What tax level would guarantee the same outcome? Answer: A tax of 45.01 would achieve the same amount of cleanup.

The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp. and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200 units). However, regulators have decided that the total amount of pollution in Springfield needs to be cut in half. Cleanup Marginal Cleanup Cost Marginal Cleanup Cost Level (A or B) ACME Bluth 10 20 30 40 2222 15 10 20 12 30 16 45 22 50 65 30 60 90 45 70 120 65 Suppose, instead, that regulators adopt pollution taxes. What tax level would guarantee the same outcome? Answer: A tax of 45.01 would achieve the same amount of cleanup.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp. and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200 units). However, regulators have decided that the total amount of pollution in Springfield needs to be cut in half. Cleanup Marginal Cleanup Cost Marginal Cleanup Cost Level (A or B) ACME Bluth 10 20 30 40 2222 15 10 20 12 30 16 45 22 50 65 30 60 90 45 70 120 65 Suppose, instead, that regulators adopt pollution taxes. What tax level would guarantee the same outcome? Answer: A tax of 45.01 would achieve the same amount of cleanup.
Transcribed Image Text:The table below depicts the marginal cleanup costs for Springfield's two polluters, ACME Corp. and Bluth Industries. Currently, each firm is polluting 100 units (for an industry total of 200 units). However, regulators have decided that the total amount of pollution in Springfield needs to be cut in half. Cleanup Marginal Cleanup Cost Marginal Cleanup Cost Level (A or B) ACME Bluth 10 20 30 40 2222 15 10 20 12 30 16 45 22 50 65 30 60 90 45 70 120 65 Suppose, instead, that regulators adopt pollution taxes. What tax level would guarantee the same outcome? Answer: A tax of 45.01 would achieve the same amount of cleanup.
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