Factory a Can Reduce Emissions at a Cost of $150

Multiple Choice

Factory A can reduce emissions at a cost of $150 per ton. Factory B can reduce emissions at a cost of $115 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) ​Both firms have an incentive to buy pollution rights.
C) ​Factory B can profit from selling its pollution rights to Factory A.
D) ​Both firms have an incentive to sell pollution rights.