Business
Business, 04.11.2019 22:31, estefaniapenalo

Meanwhile, the other employee proposes using a different strategy to achieve the government’s goal of reducing pollution in the area from 12 units to 6 units. he suggests that the government issues two pollution permits to each firm. for each permit a firm has in its possession, it can emit 1 unit of pollution. firms are free to trade pollution permits with one another (that is, buy and sell them) as long as both firms can agree on a price. for example, if firm x agrees to sell a permit to firm y at an agreed-upon price, then firm y would end up with three permits and would need to reduce its pollution by only 1 unit while firm x would end up with only one permit and would have to reduce its pollution by 3 units. assume the negotiation and exchange of permits are costless. because firm z has high pollution-reduction costs, it thinks it might be better off buying a permit from firm y and a permit from firm x so that it doesn't have to reduce its own pollution emissions. at which of the following prices are both firm y and firm x willing to sell one of their permits to firm z ? check all that apply.$128$135$181$410$424suppose the the government has set the trading price of a permit at $303 per permit. complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount it costs each firm to reduce pollution to the necessary level. if a firm is willing to buy two permits, assume that it buys one permit from each of the other firms. (hint: do not include the prices paid for permits in the cost of reducing pollution.)firminitial pollution permit allocationactionfinal amount of pollution eliminatedcost of pollution reduction(units of pollution)(units of pollution)(dollars)firm x 2 firm y 2 firm z 2 regulation versus tradable permitsdetermine the total cost of eliminating six units of pollution using both methods, and enter the amounts in the following table. (hint: you might need to get information from previous tasks to complete this table.)proposed methodtotal cost of eliminating six units of pollution(dollars)regulation tradable permits in this case, you can conclude that eliminating pollution is costly to society when the government distributes tradable permits than when it regulates each firm to eliminate a certain amount of pollution.

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