How does a cap-and-trade work to reduce emissions? When a cap-and-trade is implemented, ________. A. the government determines the efficient quantity of emissions and firms buy and sell the allocated permits B. firms determine the efficient quantity of emissions and the quantity of permits, which they allocate among themselves C. the government subsidizes firms that pollute D. the government allocates permits to firms that pollute the least and other firms either cut their emissions or leave the market