Essay
Mushroom farms emit unpleasant odors that affect third parties. The marginal cost of the odors is MC = 4Q, where Q is the quantity of fumes emitted. Mushroom farmers can reduce odors by using various techniques and technologies; the marginal abatement cost is MAC = 1,200 - 36Q.
a. Suppose the quantity of odor emission is 33. Is that too much or too little?
b. Suppose the quantity of odor emission is 15. Is that too much or too little?
c. What is the efficient quantity of odor emission?
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a. At Q = 33, MC = 4(60) = $240 and MAC ...View Answer
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