Appalachian Coal Mining believes that it can increase labor productivity and, therefore, new revenue


Question: Appalachian Coal Mining believes that it can increase labor productivity and, therefore, new revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is

MC = 40 P

where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is

MR = 1,000 - 10P

How much pollution reduction should Appalachian Coal Mining undertake?

Price: $2.99
See Answer: The answer consists of 1 page
Type of Deliverable: Word Document

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