Sulfur Dioxide Discharged (Tons) | Firm A | Firm B |
10 | $8,000 | $9,000 |
9 | 10,000 | 12,000 |
8 | 15,000 | 18,000 |
7 | 20,000 | 27,000 |
6 | 28,000 | 37,000 |
Table 16.3
Table 16.3 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. Suppose that Firm A has already sold a permit to Firm B. If Firm A contemplates selling a second permit to Firm B, what is Firm A's willingness to accept?
◦ $5,000
◦ $6,000
◦ $7,000
◦ $8,000