Suppose the Environmental Protection Agency issues pollution permits in order to limit the quantity of pollution. Under this policy, is the supply of pollution rights perfectly elastic or is it perfectly inelastic?

Pollution Permits

Allowances issued by governments that give companies the right to emit a certain amount of pollutants, intended to reduce overall pollution by market mechanisms.

Supply

The total amount of a product or service that is available for consumers to purchase at various price levels.

Pollution Rights

Permits or allowances that grant entities the right to emit a certain amount of pollutants into the environment.