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Question 3 (8 points) Use the following information to describe the workings of a tradable discharge permit market, and answer The EPA has determined that the optimal level of pollution in society is 60 units. Current levels of pollution are 72 units; thus 12 units of pollution will need to be abated. Firm Marginal Abatement Costs Current pollution levels Permits issued to each by each firm firm 1 $20 per unit of pollution 30 units of pollution 30 permits 2 $50 per unit per unit of pollution 42 units of pollution 30 permits TOTAL 72 units of pollution 60 permits A. What is the maximum price a permit could sell for? B. What is the minimum price a permit could sell for? C. Suppose the market price of a permit is $40. Describe the process of how pollution will be abated. The market allows firms to either profit or save money by not having to abate. In your discussion, calculate the profits or savings to each firm. Use complete sentences and proper grammar when answering. D. If the government decides that the optimal level of pollution has been reduced to 40 units, how will they go about reducing the permits from 60 to 40? Be specific in answering. Social Science (SS) Learning Outcome 1 Social Science (SS) Learning Outcome 2 Social Science (SS) Learning Outcome 3