The target level of pollution is 35 units. What is the cost effective level of

The target level of pollution is 35 units.
What is the cost effective level of emissions per firm? (4 marks)
Explain how we could use a tradeable discharge permit (TDP) system to achieve this level of emissions. (4 marks)
Suppose the initial distribution of permits is more or less equal; firm 1 gets 17 permits firm 2 gets 18 permits. They are given away to the firms at no charge. What are the costs each firm faces before being allowed to trade? (4 marks)
Once trading of TDPs is completed what will be the price of each permit? How many permits will each firm hold? What are the new costs each firm faces? How much does each firm gain? (5 marks))
What would the private cost to each polluter be if the permits were auctioned off at their equilibrium price? (3 mar