Firms that can only lower pollution at a high cost will have a high willingness to pay for pollution permits.

Question

Quizplus · Accepted Answer

If a firm can only lower pollution at a high cost, it may find it more cost-effective to purchase pollution permits instead of implementing costly pollution control measures. In this case, the firm would have a high willingness to pay for pollution permits, as it allows them to continue operating while also meeting pollution regulations.

Firms That Can Only Lower Pollution at a High Cost