Among the Identified Point Sources Contributing to the Pollution of Puget

Essay

Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below.
MAC_D = 2.5A_D MAC_C = 3.75A_C
TAC_D = 1.25A_D² TAC_C = 1.875A_C²
To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.
a. At the uniform abatement standard described above, find total abatement costs for both firms.
b. Instead of a uniform standard, suppose each firm faces a volume-based, marginal effluent fee (MEF) of $90. How much will each firm abate?
c.. If each firm's production is associated with the release of 50 units of effluent, how much will each pay in total effluent fees when facing the $90 marginal effluent fee?