The Hamilton Canal has two polluting firms on its banks. Acm…
The Hamilton Canal has two polluting firms on its banks. Acme Industrial and Creative Chemicals each dump 150 tons of glop into the Canal each year. The cost of reducing glop emissions per ton equals $250 for Acme and $300 for Creative. The City of Hamilton (the city) wants to reduce overall pollution from 300 tons to 100 tons. (a) If the City knows the cost of reduction for each firm, what reductions will it impose to reach its overall goal? What will be the cost to each firm and the total costs to the firms together? (2 marks)(b) In a more typical situation, the city does not know the cost of pollution reduction for each firm. If the government decides to reach the overall goal by imposing uniform reductions on the firms, calculate the reduction made by each firm, the cost to each firm, and the total cost to the firms together. (2 marks)(c) Compare the total cost of pollution reduction in questions (a) and (b). If the City does not know the cost of reduction for each firm, is there still some way for it to reduce pollution to 100 tons at the total cost you have calculated in (a)? Explain. (2 marks)
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