Question

please make sure you put in a box only the answer for "what are total world emmissions after country A enacts a carbon tax" , thank you so much !

Now suppose country A imposes a tax T on A's production of A to curb emissions. Country B, however, is not taxed. A's cost function is now cA (2A) = 4894, while B's cost function is CB(9B) = 598. World demand is P = 100 - 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? This question will show how incomplete regulation can lead to "carbon leakage". Despite A reducing output (and thus emissions), total world emissions are only partially reduced, since B responds by increasing its output (and thus emissions). Estimation of carbon leakage is an active area of research in environmental economics. Answer: Check

Answer 1

Answer is 47.5

This is derived by solving the profit maximization problem for both the countries and then solving the reaction curves together.

Adding q1 and q2 gives Q and multiplying Q by 0.5 gives total emissions