The figure given below shows the demand and supply curves of automobiles.Figure 13.3
In the figure,
D: Demand curve of automobiles
S: Supply of automobiles prior to the tax
S+t: Supply of automobiles after the tax

-The European Union Emission Trading Scheme is an example of:

Question

The figure given below shows the demand and supply curves of automobiles.Figure 13.3
In the figure,
D: Demand curve of automobiles
S: Supply of automobiles prior to the tax
S+t: Supply of automobiles after the tax
 
-The European Union Emission Trading Scheme is an example of:

Quizplus · Accepted Answer

The European Union Emission Trading Scheme is an example of cap and trade, where a limit is set on emissions and those who emit less can sell their unused emissions permits to those who emit more. It is not a pollution tax or subsidy, nor does it use a command approach or enforce private property rights.

The Figure Given Below Shows the Demand and Supply Curves