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The government has recently introduced a marketable permit program for major polluters where one permit gives permission to pollute one unit. When the program is introduced, Firm A emits 800 units of pollutant and so is granted 800 permits. After one year, firms are issued 10% fewer pollution permits. If Firm A reduces its pollutants from 800 units to 690 units, how many permits does it sell after one year

Answer :

Shahzaibfaraz

Answer:

Firm A can sell 30 permits as it has an excess of 30 permits.

Explanation:

As the permits are reduced by 10%, then the permits issued to Firm A after one year will be,

Permits issued - After one year = 800 * (1 - 10%) = 720 permits

Now as Firm A has reduced its pollutant units to 690 units, which is more than the permits issued to it, it has an excess of 30 permits.

Excess = 720 - 690 = 30 permits

Firm A can sell these permits after one year.

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