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Unformatted text preview: • The total industry supply of pollution permits (S) is split among the existing firms in the market (S = S 1 + S 2 ), and permits are traded at the going market price (P*). • Accountability and Incentives • Assigning accountability for a firm’s waste can alleviate external damages. • Secondary markets for waste products will evolve. • Example: “Beer for Bessie”...
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This note was uploaded on 04/18/2011 for the course BUS 202 taught by Professor Kreft during the Winter '09 term at Indiana.
- Winter '09