What is the market price for permits

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Reference no: EM131096724

Suppose the EU now institutes a cap and trade system. Each permit is good for one ton of carbon abatement. The total cap is 120 tons. Each of the two plant types receives an equal amount of permits.

a. What is the market price for permits?

b. Who buys permits, and who sells them? How many does each trade? Show on a graph. Label the supply and demand for permits.

Reference no: EM131096724

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