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Malik owns a steel company. He has 25 tradable permits, each of which will allow the owner of the permit to create 2 metric tons
Malik owns a steel company. He has 25 tradable permits, each of which will allow the owner of the permit to create 2 metric tons of carbon dioxide this year. His marginal benefit of using the 25th permit is $200,000, and the price of one tradable permit is $180,000. Assume that the market for tradable permits is competitive. What can be said for certain about Malik's situation? He should sell all his tradable permits. He should use all his permits and purchase another from a different firm if possible. He should use all his permits but not purchase any more. He should sell one of his tradable permits
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