Question

The paper industry and brewery industry each emit 60 tons of particulates into the air. It costs the paper industry $1,000 to remove 1 ton of particulates, and it costs the brewery industry $1,400 to remove 1 ton of particulates. In an effort to reduce particulate pollution, the government gives each industry tradable allowances worth 50 tons of particulates. We would expect that: Select one:

a.the brewery industry will buy tradable allowances from the paper industry at a cost greater than $1,400 per allowance
b. the brewery industry will buy tradable allowances from the paper industry at a cost between $1,000 and $1,400 per allowance.
c. the paper industry will buy tradable allowances from the brewery industry at a cost between 1,000 and $1,400 per allowance.
d. the paper industry will buy tradable allowances from the brewery industry at a cost greater than $1,400 per allowance

Answer 1

b. the brewery industry will buy tradable allowances from the paper industry at a cost between $1,000 and $1,400 per allowance.

Step-by-step explanation:

This is the best one to select because, buying of the tradable allowance from the paper industry would be cheaper for the brewery industry. This would enable them to effectively remove more tons of the particulates thereby reducing the air pollution.