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    Marketable Permits and Pollution Fees

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    Was not really sure of what category my question fell into. Expound on the following two market-based incentives: Pollution fees and Marketable Permits provide a market based solution to Pollution in the U. S. Please not more than 150 words.

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    Step 1
    Pollution fees increase the marginal cost of companies that emit pollutants. The market for the products of these companies will reach a market clearing price where the marginal benefits of pollution emission is equal to the marginal cost. The companies can either pay fees or invest in technology that reduces pollution whichever saves them money. The total ...

    Solution Summary

    This solution explains pollution fees and marketable permits in US. The sources used are also included in the solution.