If the government implements a cap-and-trade system to reduce pollution in a particular industry, then the

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A cap-and-trade system is a market-based approach to reducing pollution, where the government sets a limit (or "cap") on the amount of pollution that can be emitted by a particular industry. Companies are then issued tradable permits that allow them to emit a certain amount of pollution. If a company exceeds their allocation, they can purchase additional permits from other companies who have emitted less than their allotted amount.

By setting a cap on pollution, the government reduces the overall supply of pollution permits available in the market, which in turn increases the cost of emitting pollution. This causes the supply curve for pollution permits to shift to the left, as companies are now forced to either reduce their emissions or purchase more expensive permits. As a result, the price of pollution permits will increase, incentivizing companies to make investments in cleaner technologies and reducing overall pollution levels.

If the Government Implements a Cap-And-Trade System to Reduce Pollution