Two firms, A and B$,$ each currently dump $50$ tonnes of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each tonne of pollution dumped into the river. The government gives each firm $20$ tonnes' worth of pollution permits, which it can either use or sell to the other firm. It costs Firm A $$100$ for each tonne of pollution that it eliminates before it reaches the river and it costs Firm B $$50$ for each tonne of pollution that it eliminates before it reaches the river. What is likely to happen?

Question $11$Select one:

a$.$

Firm A will buy all of Firm B$\text{'}$s pollution permits. Each one will cost less than $$50.$

cross out

b$.$

Firm A will buy all of Firm B$\text{'}$s pollution permits. Each one will cost between $$50$ and $$100.$

cross out

c$.$

Firm B will buy all of Firm A;s pollution permits. Each one will cost between $$50$ and $$100.$

cross out

d$.$

Both firms will use their own pollution permits.