If the marginal cost of pollution abatement differs across firms, then regulations that require all polluters to reduce pollution by a fixed proportion will be:
A)efficient.
B)inefficient
C)ineffective.
D)fair to all polluters.

Question

Quizplus · Accepted Answer

If firms differ in their marginal cost of pollution abatement, then it is efficient for firms with the lowest marginal cost of pollution abatement to reduce pollution the most.

If the Marginal Cost of Pollution Abatement Differs Across Firms