Which of the following statements is correct? a. The use of pollution permits and corrective taxes reduce the cost of environmental protection. b. If the government chooses to distribute the tradable permits, the permits will eventually end up in the hands of the firms who value them most. c. Both statements in a and c are correct. d. It is more economically efficient in the market for pollution for the government to distribute the tradable permits than to auction them off.

answer; post closing trial balance;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.