Refer to the data provided in Table 16.2 below to answer the following question(s).Table 16.2 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.2Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$1$11$8$82 3 4212203 6103163641020420565153552480Refer to Table 16.2. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are allowed to trade permits, what is the
total cost of the pollution reduction?
A. $24
B. $40
C. $43
D. $81
Answer: C
Economics
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