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Two Firms, Acme and FirmCo, Have Access to Five Production

Question 41

Multiple Choice

Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.  Process  A  B  D  D  (smoke/day)   (10 tons/day)   (8 tons/day)   (6 tons/day)   (4 tons/day)   (2 tons/day)   Cost to Acme ($/day)  $750$800$1,000$1,400$2,000 Cost to FirmCo ($/day)  $500$750$1,200$2,200$4,000\begin{array}{|c|c|c|c|c|c|}\hline \text { Process } & \text { A } & \text { B } & \text { D } & \text { D } \\\hline \text { (smoke/day) } & \text { (10 tons/day) } & \text { (8 tons/day) } & \text { (6 tons/day) } & \text { (4 tons/day) } & \text { (2 tons/day) } \\\hline \text { Cost to Acme (\$/day) } & \$ 750 & \$ 800 & \$ 1,000 & \$ 1,400 & \$ 2,000 \\\hline \text { Cost to FirmCo (\$/day) } & \$ 500 & \$ 750 & \$ 1,200 & \$ 2,200 & \$ 4,000 \\\hline\end{array}
Suppose the firms are both currently using process A. If the government requires each firm to reduce pollution by 20%, then the total cost to society of this policy will be ______ per day.


A) $300
B) $950
C) $1,550
D) $2,350

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