Firm a and Firm B Emit 300 Tons of Pollution

question 222

Multiple Choice

Firm A and Firm B emit 300 tons of pollution each and each have marketable 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 sells its permits to Firm A for a price above $6,000.
• B) Firm A sells its permits to Firm B for a price below $6,000.
• C) Firm A sells its permits to Firm B for a price above $6,000.
• D) Firm B sells its permits to Firm A for a price below $6,000.
• E) neither Firm A nor Firm B sells permits because neither has extra permits.

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Definitions:

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone and ranks ideas according to collective agreement.

Qualitative Demand Forecasting

A method that uses subjective judgment rather than numerical analysis to predict future demand for products or services.

Envelope/Scenario Forecasting

A forecasting method that involves creating a range of possible future outcomes based on different scenarios or assumptions.

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Budget allocations specifically designated for human resources activities including recruitment, training, salaries, and benefits.