Firm a and Firm B Emit 300 Tonnes of Pollution

Multiple Choice

Firm A and Firm B emit 300 tonnes of pollution each and each have marketable permits that allow each to emit 100 tonnes of pollution. If it costs $5,000 for Firm A to eliminate 100 tonnes of pollution and it costs Firm B $6,000 to eliminate 100 tonnes of pollution, then

A) Firm A sells its permits to Firm B for a price above $6,000.
B) Firm A sells its permits to Firm B for a price below $6,000.
C) Firm B sells its permits to Firm A for a price below $6,000.
D) Firm B sells its permits to Firm A for a price above $6,000.
E) neither Firm A nor Firm B sells permits because neither has extra permits.