In a Cap-And-Trade Program, as Polluters Buy and Sell Permits

question 10

Multiple Choice

In a cap-and-trade program, as polluters buy and sell permits, they move to a situation where

• A) all firms' marginal abatement costs are equal to the price of the permits.
• B) the demand for permits will exceed the supply.
• C) total abatement costs are equal to the total amount spent on permits.
• D) the total amount spent on permits is less than the total amount spent on abatement.

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