Suppose that there are only two stationary sources in a given air quality region. The first source has been in existence for several years, while the second source is new. The following functions represent marginal abatement costs (MAC) for each polluting source:
MAC EX = 10.0 + 0.7A EX , MAC N = 9.2 + 0.5A N ,
where A EX is the percentage abatement level for the existing source, and A N is the percentage abatement level for the new source.
Assume that the aggregate abatement standard (i.e., for the region as a whole) is set at 40 percent and that the two firms' current abatement levels are A EX = 10 and A N = 30.
-Explain why the current abatement levels for the two sources do not achieve cost effectiveness.

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The Answer of Suppose that there are only two stationary sources in a given air quality region. The first source has been in existence for several years, while the second source is new. The following functions represent marginal abatement costs (MAC) for each polluting source:
MAC EX = 10.0 + 0.7A EX , MAC N = 9.2 + 0.5A N ,
where A EX is the percentage abatement level for the existing source, and A N is the percentage abatement level for the new source.
Assume that the aggregate abatement standard (i.e., for the region as a whole) is set at 40 percent and that the two firms' current abatement levels are A EX = 10 and A N = 30.
-Explain why the current abatement levels for the two sources do not achieve cost effectiveness.

Suppose That There Are Only Two Stationary Sources in a Given