Under the command-and-control regulation the supply curve for the polluting good will shift downward by a larger amount than with a tax regulation.

Question

Quizplus · Accepted Answer

Under command-and-control regulation, firms are required to follow specific limits or standards, which may not necessarily lower costs as effectively as a tax that provides financial incentives to reduce pollution. Therefore, the supply curve may not shift downward more than with a tax regulation.

Under the Command-And-Control Regulation the Supply Curve for the Polluting