UMass

MAC₂

RESEC 262 Summer

2) In the graph below are aggregate marginal abatement cost (MAC) and

marginal damage (MD) functions for two regions of the country, 1 and 2.

Use it to answer questions below.

A¹

MAC₁

1

I

MD₁

A² A³ A4

MD₂

Problem

Ambient

concentration

a. Indicate the efficient ambient standards in the graph above. [1 point]

b. Use the graph to explain why a uniform ambient concentration

standard for the country will be inefficient. [2 points]