The above figure shows the marginal benefit from pollution for ...

[ghost!]

The above figure shows the marginal benefit from pollution for two firms. If each firm receives a marketable permit to produce 25 units of pollution, which one of the following is most likely to happen?
◦ Firm B will sell some pollution rights to firm A.
◦ Firm A will produce all 50 units of pollution.
◦ Firm A will sell some pollution rights to firm B.
◦ Both firms will produce 25 units of pollution.

[dreamfighter72]

Firm B will sell some pollution rights to firm A.

[ghost!]

Thank you!

[dreamfighter72]

Always glad to help...

[pane00]

The above figure shows the marginal benefit from pollution for two firms. If both firms receive a marketable permit to pollute 25 units of pollution each, how much will each firm pollute and how much will a permit for one unit of pollution be worth?

[trog]

Firm B will sell permits to firm A until the marginal benefits are the same for both firms. Firm A will generate 37 tons of pollution and firm B will generate 13 tons of pollution. The market value of a permit will be $5.