Transferable emission permit programs work best if
A) there is asymmetric information between buyers and sellers.
B) many different markets available for buying and selling permits.
C) the permit market is competitive among buyers and sellers.
D) none of the above.

Question

Quizplus · Accepted Answer

Transferable emission permit programs work best if the permit market is competitive among buyers and sellers. This ensures that the price of the permit reflects its true value and encourages efficiency in pollution reduction among firms. Asymmetric information between buyers and sellers can lead to market inefficiencies, and having too few markets available can limit participation and hinder the effectiveness of the program.

Transferable Emission Permit Programs Work Best If