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Figure: City with Two Polluters
-(Figure: City with Two Polluters) Look at the figure City with Two Polluters. If the government wants to limit total pollution to 2,200 tons, it could impose an emissions tax of _____ on both firms.
A) $100
B) $200
C) $300
D) $400

Question

Use the following to answer questions:
Figure: City with Two Polluters 
-(Figure: City with Two Polluters) Look at the figure City with Two Polluters. If the government wants to limit total pollution to 2,200 tons, it could impose an emissions tax of _____ on both firms.
A) $100 
B) $200 
C) $300 
D) $400

Quizplus · Accepted Answer

An emissions tax of $300 would incentivize both firms to reduce their emissions to a level where the total pollution is limited to 2,200 tons, as it aligns with the marginal cost of reducing pollution for both firms.

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