Refer to the previous question where the market permit price was $100.

Refer to the previous question where the market permit price was $100. Suppose that, instead of a TEP system, an emissions tax equal to $100 per unit of emissions was implemented and that this tax rate does not change when the polluter innovates. Which of the following statements is true?

A. the cost savings from innovation under a TEP system is greater than under the emissions tax

B. the cost savings under an emissions tax is greater than under the TEP system

C. the cost savings is equal under the emissions tax and the TEP system