To help clear the skies of acid rain, the U.S. government allows the trading of emission certificates. If the price of a certificate is $25,000, then acid rain will be decreased by companies that can do so at a cost of

Question

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Companies will only buy or sell emission certificates if it is cheaper for them to do so than to directly reduce their emissions. Therefore, they will reduce acid rain if they can do so at a cost of less than $25,000, making it more cost-effective than purchasing a certificate.

To Help Clear the Skies of Acid Rain, the U