Mathematics, 07.06.2021 02:00 jetblackcap

Consider two countries, A and B, whose respective industries produce goods A and B. Total world output of the good is given by Q = 9A + 9B. There is a world demand given by P = 100 – Q. Suppose that the cost function for country A is given by cA (CA) = 89 A while the cost function in country B is given by CB(9B) = 398. The production of the good generates greenhouse gas emissions which cause global climate change. Total world emissions are 0.5 per unit of good, such that total world emissions are 0.5Q. If the two countries' industries compete in a Cournot fashion, what will the total world emissions be? Now suppose country A imposes a tax on A's production of A to curb emissions. Country B, however, is not taxed. A's cost function is now CA(CA) = 492A, while B's cost function is CB(9B) = 493. World demand is P = 99 – Q. The amount of greenhouse gas emissions per unit is still 0.5, such that total world emissions are given by 0.5Q. What are total world emissions after country A enacts a carbon tax?

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Consider two countries, A and B, whose respective industries produce goods A and B. Total world outp...

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