Based on available information about the annual auctions for SO₂ allowances A) only the largest electric utilities are allowed to bid B) allowance prices have been much higher than predicted C) allowance prices are unrelated to energy prices D) prices of SO₂ allowances are lower than originally anticipated

Question

Quizplus · Accepted Answer

The information provided does not give any indication that only the largest electric utilities are allowed to bid, that allowance prices have been higher than predicted, or that allowance prices are unrelated to energy prices. However, since the firms are trying to reduce emissions by a certain amount, it can be assumed that they will need to purchase enough allowances to cover those emissions. The fact that the combined abatement for the two firms is only 30 units suggests that they may not need to purchase as many allowances as originally anticipated, leading to lower prices.

Based on Available Information About the Annual Auctions for SO2

Based on Available Information About the Annual Auctions for SO₂