Asked by Destiny Marsh on May 19, 2024
Verified
In equilibrium, the price of a transferable emissions permit:
A) is constrained to the amount the government first charged for it.
B) equals the marginal cost of abatement for all firms.
C) equals the marginal cost of abatement for the firm with the highest cost, and exceeds the marginal cost of abatement of other firms.
D) equals the marginal cost of abatement for the firm with the lowest cost, and is less than the marginal cost of abatement of other firms.
E) equals the marginal social cost of emissions.
Transferable Emissions Permit
A market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants, allowing entities to buy, sell, or trade permits.
Marginal Cost
The increase in total cost that arises from producing one additional unit of a good or service.
Abatement
The reduction in the degree or intensity of pollution.
- Grasp the workings and ramifications of various environmental directives, such as standards for pollutants, surcharges, and assignable permits.
Verified Answer
Learning Objectives
- Grasp the workings and ramifications of various environmental directives, such as standards for pollutants, surcharges, and assignable permits.
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