Assume that both Altoa and Calcoa emit 400 tonnes of pollutionwhile producing bauxite. Suppose both firms have tradable permitsthat allow each to emit 200 tonnes of pollution. If it costs $5,000and $6,000 for Altoa and Calcoa to eliminate 200 tonnes ofpollution respectively, what will likely happen in the market fortradable permits?

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Answer Initially both Altoa and Calcoa emit 400 tons of pollution So initially 800 ton... View the full answer