If Two Firms Pollute, and the Increase in Costs to Firm

question 146

Multiple Choice

If two firms pollute, and the increase in costs to Firm A from decreasing pollution is equal to the decrease in costs to Firm B from increasing pollution

• A) the firms cannot benefit from trading the right to pollute.
• B) the firms can benefit by trading the right to pollute.
• C) while both firms can benefit from trading, there is no way for them to determine an agreeable price.
• D) both firms will stop polluting.

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Definitions:

Clutch Pedal Free Travel

The portion of the clutch pedal's movement before the clutch begins to disengage, necessary for smooth operation and gear shifting.

Clutch Facings

Clutch facings are the friction material on the faces of a clutch disc, which engage and disengage the engine from the gearbox during gear changes.

Skip-Shifting

The practice of shifting gears non-sequentially, typically skipping one or more gears, to better match engine output to driving conditions.

Incorrect Gear

A gear selection that does not match the optimal or desired operational requirements, leading to inefficiency or mechanical stress.