Two Firms,A and B,each Currently Dump 50 Tonnes of Chemicals

Multiple Choice

Two firms,A and B,each currently dump 50 tonnes of chemicals into the local river.From now on both firms will require a pollution permit for each tonne of pollution dumped into the river.The government gives each firm 20 tonnes' worth of pollution permits,which it can either use or sell to the other firm.It costs Firm A $100 for each tonne of pollution that it eliminates before it reaches the river,and it costs Firm B $50 for each tonne of pollution that it eliminates before it reaches the river.What is likely to happen

A) Firm A will buy all of Firm B's pollution permits.Each one will cost less than $50.
B) Firm A will buy all of Firm B's pollution permits.Each one will cost between $50 and $100.
C) Firm B will buy all of Firm A's pollution permits.Each one will cost between $50 and $100.
D) Firm B will buy all of Firm A's pollution permits.Each one will cost less than $50.