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Loraine Loraine
wrote...
Posts: 4563
9 years ago
Firm A and Firm B emit 300 tons of pollution each and each have marketable permits that allow each to emit 100 tons of pollution. If it costs $5,000 for Firm A to eliminate 100 tons of pollution and it costs Firm B $6,000 to eliminate 100 tons of pollution, then
A) Firm B sells its permits to Firm A for a price above $6,000.
B) Firm A sells its permits to Firm B for a price below $6,000.
C) Firm A sells its permits to Firm B for a price above $6,000.
D) Firm B sells its permits to Firm A for a price below $6,000.
E) Neither Firm A nor Firm B sells permits because neither has extra permits.
Textbook 
Essential Foundations of Economics

Essential Foundations of Economics


Edition: 7th
Authors:
Read 169 times
2 Replies
Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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Answer verified by a subject expert
Chimelo46Chimelo46
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Posts: 5641
8 years ago
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More solutions for this book are available here
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8 years ago
The textbook reference in your signature really helped me narrow it down.

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