If the number of available tradable emissions permits increases, the equilibrium price of the permits and the equilibrium quantity
a. decreases; does not change
b. decreases; increases
c. increases; increases
d. increases; does not change

b. decreases; increases

Explanation:

Tradable pollution permits are also cap and trade schemes. They give firms a legal right to pollute upto a particular level, per set, per period. Companies that pollute less can trade their unused pollution permits to organizations that pollute more.

Like many other commodities, the prices tradable pollution permits will be determined by the intersection of supply and demand curves. At equilibrium quantity, supply equal demand. The equilibrium price is the prevailing market price.

An increase in available tradable emissions permits means an increase in the supply side. An increase in the quantity supplied shifts the supply curve the right.  More goods in the market mean sellers are more than the buyers, which reduces the demand. A decrease in demand pushes the downwards.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

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