Suppose two utilities, People's Electric and Municipal Energy, each produce 500500tons of pollution per year.

Suppose two utilities, People's Electric and Municipal Energy, each produce 500500tons of pollution per year. The government has a goal of eliminating half the pollution, and, in turn, provides 250pollution permits to each utility. A pollution permit is required to legally produce a ton of pollution.  However, the two utilities are allowed to trade permits. Suppose the cost of eliminating one ton of pollution for People's Electric is $200and the cost of eliminating a ton of pollution for Municipal Energy is $50.

The total cost of each utility eliminating 250tons of pollution is