Both Firm a and Firm B Emit 300 Tons of Pollution

question 389

Multiple Choice

Both firm A and firm B emit 300 tons of pollution. Suppose both firm A and firm B have 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 will sell its permits to firm A for a price above $6,000.
• B) firm A will sell its permits to firm B for a price below $6,000.
• C) firm A will sell its permits to firm B for a price above $6,000.
• D) firm B will sell its permits to firm A for a price below $6,000.

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Definitions:

Master Gland

A nickname for the pituitary gland, given because it produces hormones that regulate many important functions of other endocrine glands.

Pituitary

A small endocrine gland situated at the base of the brain, often referred to as the "master gland," that secretes hormones influencing various physiological processes.

Endocrine System

A network of glands in the body that release hormones into the bloodstream to regulate various bodily functions.

Left Hemisphere

The left side of the brain, typically associated with analytical tasks, language processing, and logical reasoning in most individuals.