4) (30 points) Consider the emissions of an atmospheric pollutant, benzene. The graph below illustrates the market for benzene. Market for Benzene 500 450 400 Marginal Cost of Abatement ($/ton) Firm 2 Firm 1 50 O 2 6 8 10 12 14 16 18 2 Millions of tons of Benzene a) How much will the firms pollute before any policy intervention? b) If the government implemented a cap-and-trade system, distributing a total of 12 million permits, with 6 million to each firm, who would sell and who would buy permits? Explain in words and graphically. c) How much would the seller be willing to accept, and how much will the buyer be willing to pay? d) What is the equilibrium price of permits, and the equilibrium quantity of benzene production? After the exchange of permits on the open market, how much does each firm emit? Describe using a graph