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Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require
Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. Once the two businesses have traded these permits with each other, what is the likely outcome? A. business X emits 10 tonnes of pollutants and business Y emits 10 tonnes of pollutants. B. business X no longer pollutes, and business Y will not lower the amount it pollutes C. business X raises its pollution, and business Y will lower how much it pollutes D. Business Y no longer pollutes, and business X will not lower the amount it pollutes what is the correct
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