Asked by Lauren Terrell on Jul 28, 2024
Verified
Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, Alpha will reduce its emissions to ________ tons.
A) 25
B) 50
C) 75
D) 100
Pollution Tax
A levy imposed on activities that emit pollutants, intended to internalize the environmental costs of those emissions and encourage pollution reduction.
Total Emissions
The sum of all pollutants released into the atmosphere from various sources within a specified area or by a particular process.
Alpha Emissions
A type of radioactive decay where an alpha particle, consisting of two protons and two neutrons, is emitted from the nucleus of an atom, reducing its mass and changing its atomic structure.
- Familiarize with the consequence of taxation on organizational decisions about levels of pollution emissions.
Verified Answer
SN
Shiva Narsimha PulluriJul 30, 2024
Final Answer :
A
Explanation :
Alpha will reduce its emissions to the point where the marginal cost of reducing emissions equals the tax rate of $100 per ton. This occurs at 25 tons of emissions, as shown in the figure where the marginal cost curve intersects the $100 tax line.
Learning Objectives
- Familiarize with the consequence of taxation on organizational decisions about levels of pollution emissions.