Refer to Table 12-4. If the market price is $45 the firm will produce

With marketable permits to pollute, efficiency can be obtained if

A) the regulator knows the marginal cost schedule of every firm. B) firms with low marginal costs of eliminating pollution sell their permits. C) firms with low marginal costs of eliminating pollution buy up more permits. D) only one firm gets the permits to pollute.

Assume the price elasticity of demand for a product is -4. In this case, the firm's optimal markup is (approximately):

A) 400 percent. B) 100 percent. C) 33 percent. D) 25 percent.