With marketable pollution permits, if the number of pollution rights available increases, the equilibrium price _______ and the equilibrium quantity _______ .

Question

Quizplus · Accepted Answer

When the number of pollution rights available increases, the supply of these rights increases, leading to a decrease in their price due to the surplus. As the price decreases, firms are more willing to purchase these rights, leading to an increase in the equilibrium quantity of pollution rights traded.

With Marketable Pollution Permits, If the Number of Pollution Rights