$\begin{array}{l}
\begin{array}{ccc}
\text { Reduction in Emissions}& \text {MC to Reduce Emissions} & \text {MC to Reduce Emissions }\
\text { (in tons) } & \text { by Steel Plant } & \text { by Paper Plant } \
\hline 1 & \$ 400 & \$ 200 \
2 & 500 & 280 \
3 & 600 & 320
\end{array}
\end{array}$
$\text {Table $28.1$}$ Refer to Table 28.1.Suppose the government allows these two firms to trade pollution permits.The most efficient transaction would result in

Question

$\begin{array}{l}
\begin{array}{ccc}
\text { Reduction in Emissions}& \text {MC to Reduce Emissions} & \text {MC to Reduce Emissions }\
\text { (in tons) } & \text { by Steel Plant } & \text { by Paper Plant } \
\hline 1 & \$ 400 & \$ 200 \
2 & 500 & 280 \
3 & 600 & 320
\end{array}
\end{array}$ 
$\text {Table $28.1$}$  Refer to Table 28.1.Suppose the government allows these two firms to trade pollution permits.The most efficient transaction would result in

Quizplus · Accepted Answer

The most efficient transaction would result in the paper plant reducing its emissions because it has a lower marginal cost (MC) for reducing emissions across all levels compared to the steel plant. This means it is cheaper for the paper plant to reduce emissions than it is for the steel plant.

Table 28.1\text {Table \(28.1\)}Table 28.1 Refer to Table 28

$\text {Table \(28.1\)}$ Refer to Table 28