Which of the following is not a characteristic of pollution permits?
A)Prices are set by supply and demand.
B)Allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation.
C)Real-world markets for pollution permits include sulfur dioxide and carbon.
D)Firms for whom pollution reduction is very expensive are willing to pay more for permits than firms for whom pollution reduction is less expensive.

Question

Quizplus · Accepted Answer

Trading pollution permits does not reduce the total quantity of pollution beyond the initial allocation; it allows for a more cost-effective distribution of pollution reduction efforts among firms. The total quantity of pollution permitted remains constant, as determined by the initial allocation of permits.

Which of the Following Is Not a Characteristic of Pollution