With marketable permits to pollute, efficiency can be obtained if
A) the regulator knows the marginal cost schedule of every firm.
B) firms with low marginal costs of eliminating pollution sell their permits.
C) firms with low marginal costs of eliminating pollution buy up more permits.
D) only one firm gets the permits to pollute.

Question

Quizplus · Accepted Answer

Efficiency is achieved when firms with low marginal costs of reducing pollution sell their permits to firms with higher costs, allowing pollution reduction at the lowest overall cost.

With Marketable Permits to Pollute, Efficiency Can Be Obtained If