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Fitting optimum quantity by considering the Marginal Cost also Marginal Revenue.

Appalachian Coal mining trusts it can increase labour productivity and therefore net revenue by reducing air pollution in its mines. It approximations that the marginal cost function for reducing pollution by installing additional capital equipment is

MC = 40P

Where P represents a decrease of one unit of pollution in the mines. It likewise feels that for every unit of pollution reduction the marginal increase in revenue (MR) is

MR= 1,000 - 10P

How much pollution reduction must Appalachian Coal mining undertake?

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M921239

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