Under cap and trade systems
A)an upper limit is set that sets the marginal social costs equal to the marginal benefits of emissions.
B)an upper limit that sets marginal private costs equal to the marginal private benefits of emissions.
C)an upper limit that sets marginal social costs equal to the marginal private benefits of production.
D)an upper limit that sets marginal private costs equal to the marginal social benefits of production.

Question

Quizplus · Accepted Answer

Cap and trade systems aim to control pollution by setting an upper limit on emissions, which is designed to align the marginal social costs of pollution with the marginal social benefits of emitting, thereby internalizing the external costs of pollution.

Under Cap and Trade Systems