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1) The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park which are sold by the government. Each

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1) The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park which are sold by the government. Each permit allows the owner to release 1 tonne of pollutants into the atmo sphere. 000 a) If no fee for a pollution permit were charged. and assuming a straightline demand curve, what quantity of pollutants would be discharged into the atmosphere? b) Suppose government were to set a fee of $6 per permit. What quantity of pollutants would now be dumped and what would be the revenue of government. c) Suppose that new technology allows for a signicant reduction in hydrocarbons at a relatively low cost so that the demand for permits drops by 500 tonnes. Assuming that government holds the permit fee at 86. what quantity of pollutants would now be dumped, and what would be the total revenue received by government? (1) After the change of demand in c). what would happen if instead of maintaining the fee at 86. government wants to maintain the same level of pollutants as in b). W'hat fee would have to be charged and what would be the new revenue

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