alleryStart learning →Permits are described as marketable, which means that firms can:
ABuy and sell them
BPrint more of them
CIgnore them freely
DReturn them for cash
Answer & Solution
Correct answer: A. Buy and sell them
1. The word marketable points to what firms may do with a permit.
2. Marketable permits are one of the three market-oriented approaches.
3. These permits are marketable, meaning that firms can buy and sell them.
4. A firm that cuts pollution cheaply can sell its spare permits.
5. A firm facing high cleanup costs can buy them instead.
_Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_
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