Once Tradable Pollution Permits Have Been Allocated to Firms

Multiple Choice

Once tradable pollution permits have been allocated to firms,

A) the government controls the price of permits.
B) firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.
C) the value of pollution-saving technology will be lower than the market value of a pollution permit.
D) the Coase theorem is no longer applicable as a solution to reducing pollution.