When the Government Issues Marketable Permits

When the government issues marketable permits

A) each firm buys or sells permits until its marginal benefit from polluting equals the market price of a permit.
B) firms that have a low marginal cost of reducing pollution sell their permits, and firms that have a high marginal cost of reducing pollution buy permits.
C) the incentive to pollute is greater than when the government sets emission charges.
D) the price at which firms buy and sell permits is set by the government.
E) firms that have a high marginal cost of reducing pollution sell their permits, and firms that have a low marginal cost of reducing pollution buy permits.

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