For any given demand curve for the right to pollute, the government can achieve the same outcome either by setting a price with a corrective tax or by setting a quantity with pollution permits. Suppose there is a sharp improvement in the technology for controlling pollution.
Illustrate the effect of this development on the demand for pollution rights.

We will try to study this as the market for pollution rights.

The government supplies pollution rights and industries demand pollution rights. A sharp improvement in pollution controlling technology will cause a similar effect to a technological improvement that increases productivity in any other type of industry.

This technological improvement shifts the supply curve to the right, increasing the quantity supplied at every price level. The increase in the quantity supplied will result in a lower equilibrium price (lower tax) and an increase in the quantity demanded (more pollution rights demanded).

answer; im, thinking it should be (7yrs)///plz check first.good luck

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