The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called

Refer to the scenario above. How much should he pay for the painting if he thinks that there is a 70% chance that the painting he is buying is original?

A) $50,000 B) $35,000 C) $70,000 D) $15,000

If the state uses a uniform standard, show that such a ruling would not be cost-effective. Which firm should be abating more, and which firm should be abating less?

Consider the environmental problem created by two paint companies that release chromium wastes into a nearby stream. The state authorities set a standard for the waterway that requires a combined abatement level (A) for chromium of 15 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1 = 3.2A1 and MAC2 = 0.8A2, where costs are measured in thousands of dollars.