1.In the multiple-polluter case for a pollution permit system, suppose Firm 1 and Firm 2 face marginal abatement cost functions of MAC₁ = 4.5A₁ and MAC₂ = 2.25A₂, respectively. If the government issues each firm tradeable pollution permits such that each has to abate 10 units of pollution, then, based on this allocation,

A.the two firms have no incentive to trade

B.firm 1 has an incentive to buy a permit if the price is greater than $45

C.firm 2 has an incentive to buy a permit if the price is above $22.50

D.firm 2 will be willing to sell a permit if the price is above $22.50