In the market for pollution permits, the demand for permits comes from
A) firms that would prefer to use permits rather than incur abatement costs.
B) the Chicago Board of Trade.
C) firms with low abatement costs.
D) the Environmental Protection Agency.

Question

Quizplus · Accepted Answer

The demand for pollution permits comes from firms that would prefer to use permits rather than incur abatement costs. This is because purchasing permits allows firms to continue polluting up to a certain limit, while abatement costs would involve reducing pollution levels directly, which may be more expensive for some firms.

In the Market for Pollution Permits, the Demand for Permits