The Following Graph Shows the Market for Pollution Rights

question 124

Multiple Choice

The following graph shows the market for pollution rights. Which of the following could not have caused an increase in the demand for pollution rights?​ ​
Figure 17.4
​

• A)An increase in the number of polluting firms
• B)An increase in the ability of the firm to absorb pollutants​
• C)A decrease in the cost of pollution abatement equipment​
• D)The ability of existing firms to sell pollution rights at a price lower than the market price.
• E)The subsidy provided by the government on the price of pollution rights

---

Definitions:

Net Cash Flow

Net cash flow is the amount of cash generated or lost over a specific period, resulting from a company's operating, investing, and financing activities.

Net Income

The total profit of a company after all revenues, cost of goods sold, operating expenses, and taxes have been subtracted.

Cash Payback Period

The expected period of time that will elapse between the date of a capital expenditure and the complete recovery in cash (or equivalent) of the amount invested.

Fixed Asset

A durable, physical asset that a company possesses and utilizes in its activities to produce revenue over an extended period.