Assume that two power plants, Firm 1 and Firm 2 release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard.Â Â To meet the standard, 30 units of SO2 must be abated in total.Â Â The two firms face the following abatement costs:MAC1=16+0.5A1, MAC2=10+2.5A2 where costs are measured in thousands of dollars.a. Prove that a uniform standard will not meet the cost effectiveness criterion.b. Determine how the abatement levels should be reallocated across the two firms to minimize costs.Question:Assume that two power plants, Firm 1 and Firm 2 release sulfur dioxide (SO2) in a small urbancommunity that exceeds the emissions standard.&Acirc;&nbsp;&Acirc;&nbsp;To…
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