The diagram below shows a market for tradable pollution permits.
FIGURE 17-8
-Refer to Figure 17-8,which depicts the market for tradable pollution permits.If the environmental organization called "Friends of the Earth" buys a large quantity of pollution permits and permanently decides not to use them,then
A) the demand curve shifts to the left,and the equilibrium price falls.
B) the supply curve shifts to the right,and the equilibrium price falls.
C) the supply curve shifts to the left,and the equilibrium price rises.
D) allocative efficiency is lost.
E) there is no impact on the equilibrium.
Correct Answer:
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