With tradable emissions permits,if the demand for goods that produce emissions shifts to the left,the equilibrium price of permits _____ and the equilibrium quantity _____.
A)increases;stays the same
B)decreases;increases
C)decreases;stays the same
D)increases;increases

Question

Quizplus · Accepted Answer

When the demand for goods that produce emissions decreases (shifts to the left), the demand for emissions permits also decreases. This leads to a lower equilibrium price for permits. However, the total quantity of permits is typically fixed by regulation and does not change with demand, so the equilibrium quantity stays the same.

With Tradable Emissions Permits,if the Demand for Goods That Produce