With marketable pollution permits, if the demand for emissions shifts to the left, the equilibrium price of permits _______ and the equilibrium quantity _______ .

Question

Quizplus · Accepted Answer

When the demand for emissions shifts to the left, it means there is less demand for pollution permits. This decrease in demand leads to a lower equilibrium price for the permits. However, the total quantity of permits is typically fixed by regulation, so the equilibrium quantity of permits stays the same.

With Marketable Pollution Permits, If the Demand for Emissions Shifts