If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated and a marketable pollution permit trades for $14 per ton,
A)PG&E could gain by buying and Con Ed could gain by selling.
B)society would gain if PG&E would sell and Con Ed would buy.
C)both PG&E and Con Ed could gain by buying.
D)both PG&E and Con Ed could gain by selling.

Question

Quizplus · Accepted Answer

Society would gain if PG&E, which has a lower abatement cost, sells permits to Con Ed, which has a higher abatement cost, allowing for more cost-effective pollution reduction.

If It Costs Con Ed Approximately $20 Per Additional Ton