The equilibrium permit price of a pollution right is _______
A)determined by the consumers consuming the products of the polluting firms.
B)determined by the government.
C)determined by the municipal corporation of the area.
D)determined by the supply of and the demand for pollution rights.
E)determined by the marginal social costs of the products of the polluting firms.

Question

Quizplus · Accepted Answer

The equilibrium permit price of a pollution right is determined by supply and demand for pollution rights. The supply of the pollution rights is determined by the government while the demand is determined by the polluting firms. The price at which the supply of pollution rights equals the demand for pollution rights is the equilibrium permit price.

The Equilibrium Permit Price of a Pollution Right Is _______