Suppose the current price of a marketable permit to emit one ton of sulfur dioxide is $100. If the marginal cost for a firm to reduce one ton of sulfur dioxide is $80, then: the firm will be willing to pay up to $200 for a permit. the firm will shut down. the firm will buy the permit and increase its emissions by 20 tons. the firm will reduce its emissions of sulfur dioxide by one ton. the firm will buy the permit and emit one more ton of sulfur dioxide.
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