(Figure: City with Two Polluters) Use Figure: City with Two Polluters.If the government does not intervene in the pollution market,equilibrium will occur where firm A produces ___ tons of pollution and firm B produces _ tons of pollution,for a total of ___ tons.

A) 2,000;2,000;4,000
B) 0;1,000;1,000
C) 1,000;0;1,000
D) 800;1,400;2,200

Question

(Figure: City with Two Polluters) Use Figure: City with Two Polluters.If the government does not intervene in the pollution market,equilibrium will occur where firm A produces _____ tons of pollution and firm B produces _____ tons of pollution,for a total of _____ tons.

A) 2,000;2,000;4,000
B) 0;1,000;1,000
C) 1,000;0;1,000
D) 800;1,400;2,200

Victoria Trevino · Accepted Answer

Final Answer : A, Explanation :  Without government intervention, each firm will produce at its maximum capacity without considering the external costs of pollution, leading to a total of 4,000 tons of pollution if both firms produce 2,000 tons each.

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