In the market for pollution permits, the total supply of permits is
A) perfectly inelastic.
B) perfectly elastic.
C) determined by the Chicago Board of Trade.
D) always equal to the demand for permits.

Question

Quizplus · Accepted Answer

The total supply of pollution permits is perfectly inelastic because it is fixed by the regulatory authority and does not change in response to the market price.

In the Market for Pollution Permits, the Total Supply of Permits