Two firms A and B, making up a sector of the economy, emit pollution (pol) and have marginal abatement costs: MAA = 24- pol and MAB = 24-(1/2)pol. So the total abatement curve for this sector is given by MA = 24-(1/3)pol. The marginal damage function is constant at a value of $12 per unit of pollution emitted: MD = $12.
(a) Draw the MD and market-level MA curves and establish the efficient level of pollution for this economy.