What results once tradable pollution permits have been allocated to firms?
a) The government controls the price of permits.
b) The total amount of pollution governed by the permit will always decrease.
c) The value of pollution-saving technology is always lower than the market value of a pollution permit.
d) Firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.
Answer: d) Firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.
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