To create the market demand curve for pollution permits, you must A

The answer is A.

Creating a market demand curve for pollution permits, an individual horizontally sums up all firms' demand curves. A pollution permit could be categorized as a private good. In determining the market demand for private goods, in this case, pollution permits, there is a need for the horizontal summing of all firms' demands. Summing up horizontally, the actual amount of the firms' pollution permits at each price gets established.

In the cases of publicly utilized goods, like defense, acquiring a market demand entails the vertical summing up of the firms' demand curves. It is so because consuming the goods by an individual does not limit another individual from consuming the goods or services, unlike private goods. Thus, horizontal summing up involves adding up the amounts needed by individuals in the market, each at a price to find the market demand. In comparison, vertical summing up entails adding the prices at a quantity, meaning a quantity gets established before setting the price, which is not the case in private goods, where prices get set, and the consumers decide the number of products they can acquire based on the amount of money they have.