In a competitive market for tradable pollution permits, the quantity of permits (for a given amount of pollution) is set by ________, and the equilibrium price is determined by ________.a.government policy; government policyb.market forces; government policyc.government policy; the average cost of pollution abatementd.government policy; market forces

Competitive market refers to a market scenario in which there are large number of buyers and sellers…

Answered: In a competitive market for tradable…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section30.3: Environmental Policy

Problem 1ST

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In a competitive market for tradable pollution permits, the quantity of permits (for a given amount of pollution) is set by ________, and the equilibrium price is determined by ________.

government policy; government policy

market forces; government policy

government policy; the average cost of pollution abatement

government policy; market forces

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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