However the marginal cost of reducing a ton of pollution


Suppose the US has two utilities, Commonwealth Utilities and Consolidated Electric.Both produce 20million tons of sulfur dioxide pollution per year. However, the marginal cost of reducing a ton of pollution for Commonwealth Utilities is $325 per ton and the marginal cost for Consolidated Electric in$400 per ton.The government's goal is to cut sulfur dioxide pollution in half (20 million tons per year).

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