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2. Draw a graph with pollution abatement on the horizontal axis (assume a firm can remove...

2. Draw a graph with pollution abatement on the horizontal axis (assume a firm can remove up to 100 tons of pollution) and dollars ($) on the vertical axis. Draw one firm’s marginal abatement cost curve (MC). Consider two possible policies to reduce pollution: a standard and taxes. Assume the tax is set in such a way that it results in the same pollution reduction by the firm as the standards policy. In this case, would the firm prefer one policy over the other? Why or why not? Explain using your graph.

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