Under a Transferable Emissions Permit System with N Possible Polluters

question 50

Multiple Choice

Under a transferable emissions permit system with n possible polluters, the government enforces the total amount of emissions allowable at X units by:

• A) setting a different fee for each firm so that each firm chooses to emit X/n units.
• B) setting the same fee for each firm so that each is forced to emit X/n units.
• C) setting a different standard for each firm, with X/n being the average.
• D) setting the same standard for each firm at X/n.
• E) issuing X permits.

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