(Table: Pollution from Firms) Suppose that each firm is emitting 10 units of pollution, for a total of 20 units. The government would like to decrease total pollution to 10 units by giving each firm five tradable pollution permits.
a. How many units of pollution will each firm emit under the tradable permit system?
b. Which firm will sell unused pollution permits to the other firm?
c. How much will the pollution permits sell for?

Question

(Table: Pollution from Firms) Suppose that each firm is emitting 10 units of pollution, for a total of 20 units. The government would like to decrease total pollution to 10 units by giving each firm five tradable pollution permits.  
a. How many units of pollution will each firm emit under the tradable permit system?
b. Which firm will sell unused pollution permits to the other firm?
c. How much will the pollution permits sell for?

Quizplus · Accepted Answer

The Answer of (Table: Pollution from Firms) Suppose that each firm is emitting 10 units of pollution, for a total of 20 units. The government would like to decrease total pollution to 10 units by giving each firm five tradable pollution permits.  
a. How many units of pollution will each firm emit under the tradable permit system?
b. Which firm will sell unused pollution permits to the other firm?
c. How much will the pollution permits sell for?

(Table: Pollution from Firms) Suppose That Each Firm Is Emitting