Economic

Consider I companies with emission reduction costs (73:1 / QQiRE. Companies have base line emissions Et- and an emissions target Ti. Without permit trade, companies have to cut emissions such that Ti: (l-Ri) E35. What are emission cuts with permit trade? Hint: Assume that all companies are pricetakers. What is the permit price? Assume that [=3j 0:1 1, a2 2, a3 3, E1 100 and ill-:90. What is the difference in costs with and Without trade? What happens to the permit price and emissioln reductions if T1280 and T32100