question archive In a competitive market for tradable pollution permits, the quantity of permits (for a given amount 90) of pollution) is set by and the equilibrium price is determined by A) government policy; the average cost of pollution abatement B) market forces; government policy C) market forces; market forces D) government policy; market forces E) government policy; government policy
In a competitive market for tradable pollution permits, the quantity of permits (for a given amount 90) of pollution) is set by and the equilibrium price is determined by A) government policy; the average cost of pollution abatement B) market forces; government policy C) market forces; market forces D) government policy; market forces E) government policy; government policy
Subject:EconomicsPrice:2.86 Bought3
In a competitive market for tradable pollution permits, the quantity of permits (for a given amount 90) of pollution) is set by and the equilibrium price is determined by A) government policy; the average cost of pollution abatement B) market forces; government policy C) market forces; market forces D) government policy; market forces E) government policy; government policy
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The correct option is:
d) government policy; market forces
Step-by-step explanation
Please note that:
In a competitive market for tradable permits, the price is set by the market. The forces of demand and supply determine the price to be paid for a tradable permit. Thus the price will be obtained at the point of intersection between the demand curve and supply curve.
