Table 9.7 -Table 9.7 Shows the Production Cost for Two Utilities at Utilities

question 194

Multiple Choice

Table 9.7
-Table 9.7 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm and that Firm A has sold one permit to Firm B. If Firm B wants to purchase a second permit to be able to discharge 10 tons of sulfur dioxide, what is Firm B's willingness to pay?

• A) $2,000
• B) $3,000
• C) $5,000
• D) $9,000

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