The concept of marginal cost is how much it will take a firm to produce (or, in this case eliminate) an additional unit. For instance, a telecom company trying to attract customers might see the marginal cost of attracting their first customer as millions and millions of dollars since they have to install an immense amount of infrastructure. However, once the company has the infrastructure in place, it costs them very little to put more and more people on their system, so the marginal cost of adding the thousandth customer may be very small.
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<br>In the case of this problem, we have a chart that details exactly what the marginal costs are to these two companies to reduce additional units of pollution.
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<br>Q1)
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<br>PART A
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<br>a) from the chart, $3
<br>b) from the chart, $3
<br>c) continuing to read from the chart, acrid acid company will have to pay $1, ...

Solution Summary

It is an excellent response for students who want to understand the concepts and then use the same concepts to solve similar problems in the future. Overall, a very good response. Detailed steps are provided for everything. The response is very well written and easy to understand as well.

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