Firm a and Firm B Emit 300 Tonnes of Pollution

question 95

Multiple Choice

Firm A and Firm B emit 300 tonnes of pollution each and each have marketable permits that allow each to emit 100 tonnes of pollution. If it costs $5,000 for Firm A to eliminate 100 tonnes of pollution and it costs Firm B $6,000 to eliminate 100 tonnes of pollution, then

• A) Firm A sells its permits to Firm B for a price above $6,000.
• B) Firm A sells its permits to Firm B for a price below $6,000.
• C) Firm B sells its permits to Firm A for a price below $6,000.
• D) Firm B sells its permits to Firm A for a price above $6,000.
• E) neither Firm A nor Firm B sells permits because neither has extra permits.

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Definitions:

Employee Relations

An area of human resources management concerned with maintaining positive, productive, and ethical relationships between employers and their employees.

Public Relations

The professional practice of managing and guiding perceptions of individuals, companies, or organizations by the public and media.

Internal Communications

The function responsible for effective communications among participants within an organization.

Corporate Culture

Describes the shared values, beliefs, and norms that affect the behavior and decision-making of an organization's members.