A-LevelEconomicsMarket Failure and Government InterventionMay/June 2019Paper 3 Q171 Mark
The table shows a firm that has four possible methods of production to make its desired output. Each method has a different cost and causes a different amount of pollution. The government rules that polluting firms must buy pollution permits that cost $90 each. Each permit allows the firm to emit 1 tonne of pollution. No pollution can be emitted without a permit. Which method of production has least total cost? cost of production ($ per day) pollution caused (tonnes per day) A 320 3 B 380 2 C 480 1 D 700 0
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