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Business, 17.12.2019 22:31 leleee10

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

$424

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Answers: 3

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