Exhibit -Refer to Exhibit

Exhibit
$\begin{array}{lrr} \text {Cost of Reducing} & & & \\ \text {Emissions from }& \text { Firm A} & \text { Firm B} & \text {Firm C }\\\hline \text { 5 to 4 tons} & \$ 500 & \$ 100 & \$ 200 \\ \text {4 to 3 tons }& \$ 600 & \$ 200 & \$ 250 \\ \text {3 to 2 tons }& \$ 700 & \$ 300 &\$ 350 \\ \text {2 to 1 ton} & \$ 800 &\$ 400 &\$ 500 \\ \text {1 ton to zero }& \$ 900 & \$ 500 &\$ 700 \end{array}$
-Refer to Exhibit. What would be the total cost if each firm was initially emitting 5 tons of pollution, then the government issued transferable pollution rights allowing a total of 9 tons of pollution in the industry in order to decrease pollution by a total of 6 tons?

A) $1,400
B) $1,700
C) $1,840
D) $3,600

Correct Answer:

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