Which of Answer Best Explains How the Market for Tradable

question 142

Multiple Choice

Which of answer best explains how the market for tradable allowances in pollution works?

• A) Firms are given a particular dollar subsidy value to clean up pollution, and they can trade these subsidies between themselves if they fall below or surpass the limits.
• B) Firms are taxed a particular percentage rate according to how much they pollute, and they can trade the pollutants to reduce the effective tax rates they pay.
• C) Firms are required to stick to particular production levels, and if they go beyond these production levels, they are charged a percentage of their profits.
• D) Firms are given a particular allowance amount of pollutants, and if they fall below or surpass these targets they can trade their available allowances with other firms.

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Definitions:

Trade Discount

A reduction in the list price granted by a seller to a buyer, often based on the volume of goods purchased or to maintain a long-term sales relationship.

Trade Discount

A reduction from the list price granted by a seller to a buyer based on the volume or quantity purchased or to stimulate sales.

Discount Series

A sequence of discounts applied one after the other, often used to determine the final price after multiple discounts are applied.

Trade Discount

A reduction in the price of goods or services offered by a seller to a buyer in the business-to-business market.