Which of the following is not a characteristic of pollution permits?

A) Prices are set by supply and demand.
B) Allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation.
C) Real-world markets for pollution permits include sulfur dioxide and carbon.
D) Firms for whom pollution reduction is very expensive are willing to pay more for permits than firms for whom pollution reduction is less expensive.

Pollution Permits

Allowances or credentials issued by governing bodies that enable the holder to emit a specific amount of pollutants over a set time period.

Supply And Demand

The fundamental economic model describing the interaction between the availability of goods (supply) and the desires of those with purchasing power (demand).

Sulfur Dioxide

A colorless gas with a sharp odor, produced by burning sulfur or fossil fuels, and known for its role in causing acid rain.