Problem
A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The table below shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits.
|
Emissions
|
Total Cost
|
Marginal Cost
|
Total Benefit
|
Marginal Benefit
|
|
16 MG
|
Current
|
N/A
|
Current
|
N/A
|
|
12 MG
|
50
|
|
800
|
|
|
8 MG
|
150
|
|
1300
|
|
|
4 MG
|
500
|
|
1650
|
|
|
0 MG
|
1200
|
|
1950
|
|
a) Complete the table.
b) What is the optimal level of sewage for this city? How can you tell?