Narrbegin Exhibit 10.4 The market for permits
-If the cap in Exhibit 10.4 increased to 50 permits, the resulting price given 'Demand 1' will be:

Question

Narrbegin Exhibit 10.4 The market for permits  
-If the cap in Exhibit 10.4 increased to 50 permits, the resulting price given 'Demand 1' will be:

Quizplus · Accepted Answer

If the cap increases to 50 permits, the market supply curve will shift to the right, and the new equilibrium price will be where the new market supply curve intersects with the demand curve. Based on the exhibit, this intersection occurs at a quantity of 40 permits, and at this quantity, the price is $40 per permit. Therefore, the resulting price given 'Demand 1' will be $40.