Factory A can reduce emissions at a cost of $400 per ton. Factory B can reduce emissions at a cost of $100 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B.
b. Neither firm can profit from selling its pollution rights to the other.
c. Factory B can profit from selling its pollution rights to Factory A.
d. Both firms have an incentive to sell pollution rights.
c
Economics
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A network externality acts as a barrier to entry.
Answer the following statement true (T) or false (F)
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