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Author Question: The diagram below shows the marginal cost of abatement for each of two firms, A and B. Each firm is ... (Read 72 times)

elarge

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on: Oct 12, 2022

The diagram below shows the marginal cost of abatement for each of two firms, A and B. Each firm is initially abating Q0 units of pollution.



FIGURE 17-8

Refer to Figure 17-8. Suppose a system of tradable pollution permits is introduced into this market and the equilibrium permit price is p*. We can expect that


◦ Firm B will buy permits from Firm A, pollute less, and increase its costs by the areas 2 + 3; Firm A will sell permits to Firm B, pollute more, and reduce its earnings by areas 4 + 5.
◦ Firm B will sell permits to Firm A, pollute more, and reduce its costs by the area 1; Firm A will buy permits from Firm B, pollute less, and increase its earnings by area 4.
◦ Firm B will sell permits to Firm A, pollute less, and reduce its costs by the area 1; Firm A will buy permits from Firm B, pollute more, and increase its costs by the area 4.
◦ Firm B will buy permits from Firm A, pollute more, and reduce its costs by the area 1; Firm A will sell permits to Firm B, pollute less, and increase its earnings by area 5.
Microeconomics ¦ Ragan ¦ 17th Edition
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Marked as best answer by elarge on Oct 12, 2022

xinyifff

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Reply #1 on: Oct 12, 2022
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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elarge

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Reply 2 on: Oct 12, 2022
YES! Correct, THANKS for helping me on my review

vickybb89

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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