When One Firm Sells Its Pollution Permit to Another Firm

question 450

Multiple Choice

When one firm sells its pollution permit to another firm,

• A)both firms benefit.
• B)the total amount of pollution remains the same.
• C)the total amount of pollution decreases.
• D)Both a and b are correct.

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Definitions:

Cover

To provide protection against something, such as insurance coverage protects against specific risks.

Non-breaching Buyers

Buyers who have fulfilled their contractual obligations and have not violated the terms of the contract.

UCC

The Uniform Commercial Code is an all-encompassing set of legal directives that oversee commercial trades in the United States.

Insolvent

A financial state in which an individual or entity is unable to meet their debt obligations as they become due because their liabilities exceed their assets.