Microeconomics: Principles, Applications, and Tools (8th Edition)

by O'Sullivan, Arthur; Sheffrin, Steven; Perez, Stephen

Published by Prentice Hall

ISBN 10: 0-13294-886-9

ISBN 13: 978-0-13294-886-9

Chapter 16 - External Costs and Environmental Policy - Exercises - 16.4 Marketable Pollution Permits - Page 374: 4.1

Answer

high low

Work Step by Step

Firm H will pay up to \$5000 while L will accept up to \$2000. Therefore, Firm H has $\textbf{high}$ abatement, while L has $\textbf{low}$ abatement.

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