Consider a coal-fired electric-power plant that is operating under a cap-and trade-system.If its marginal cost of pollution abatement is $5 per unit and the price of the permit is $3 per unit,this firm will
A) not abate at all.
B) not buy any permits,since that would push up its costs.
C) buy permits and abate more pollution.
D) buy permits and abate less pollution.
E) sell permits and abate more pollution.
Correct Answer:
Verified
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