Optimal production with emission permits and trading under the restricted by government subsidies and punishment mode

Based on the result in literature^[5], the paper focuses on exploring enterprise optimal production problem, considering emission permits and trading, restricted by Government subsidies and punishment policy. We build the corresponding model considering such condition, and compute its optimal solution, then investigate the relationship between optimal output and enterprise optimal revenue in the model, also analyze enterprise production optimal management in such restriction. The result shows: the structure of enterprise optimal production and optimal revenue is similar to that in the literature[5], and the optimal revenue is still proportional to the square of optimal production, in the case of linear inverse demand function, only the content in optimal production is a little different.