Suppose the government decides to give each ferry line 50 tradable permits. Each permit allows a ferry line to produce one unit of pollution. c. The firm that values the permits most is [ Select ] The...

Extracted text: Suppose the government decides to give each ferry line 50 tradable permits. Each permit allows a ferry line to produce one unit of pollution. c. The firm that values the permits most is [ Select ] The firm that would place the lowest value on its permits is [ Select ] d. When the ferry lines trade permits, the firm which values them the most will buy from the firm that values them the least. With this in mind, which firm will sell permits and which will buy? How many permits will be bought/sold? Firm A will [ Select ] Firm B will [ Select ] Firm C will [ Select ]


Extracted text: Problem 3: Tradable Permits There are three major ferry lines operating on the East River, each generating 100 units of pollution per year. The ferry lines face the costs of reducing pollution that are shown in the table below. Cost of reducing pollution by 1 unit $1,500 $2,500 $1,800 Ferry line В The government has decided it wants to reduce pollution levels by 50 percent and requires each ferry line to cut its pollution in half. a. Determine the cost of pollution reduction for each ferry line. Ferry Line Total cost of cutting pollution in half А 2$ В 2$ C 2$ b. What is the total cost of pollution reduction? 2$ ABC