Factory A can reduce emissions at a cost of $400 per ton. Factory B can reduce emissions at a cost of $100 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B.
b. Neither firm can profit from selling its pollution rights to the other.
c. Factory B can profit from selling its pollution rights to Factory A.
d. Both firms have an incentive to sell pollution rights.
c
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Evaluate the following statement. The Cournot model basically assumes that the sole decision of each firm in a duopoly is one of determining how much to produce not which price to set
What will be an ideal response?
If the government sets a minimum wage which is more than the equilibrium wage, the firms tend to demand more labor
a. True b. False Indicate whether the statement is true or false
An explicit cost is: a. an opportunity cost for which payment is not required. b. an out-of-pocket expense
c. always larger than an associated implicit cost. d. both (a) and (b)
If price increases 6% and the quantity exchanged decreases 6%, what does that tell us about the elasticity of supply? a. It tells us nothing about the elasticity of supply. b. Supply is elastic
c. Supply is inelastic. d. Supply is unit elastic.