Assume that two power plants, Plant 1 and Plant 2, emit sulfur dioxide in the areas surrounding an urban community and exceed the maximum emission standard. To reach the standard, 30 units of SO2 must be reduced in total. The costs of reduction of the two plants are the following:
MAC1 = 16 + 0.5 A1
MAC2 = 10 + 2.5 A2
a. Show that a uniform standard of pollution reduction will not meet the cost-effectiveness criterion
b. Determine how the pollution reduction units should be allocated between the two plants to minimize costs