If the marginal cost of pollution abatement is different across firms,then regulations that require fixed-percentage reductions in pollution will be
A) inefficient.
B) fair to all polluters.
C) advantageous to small firms.
D) efficient.
E) ineffective.

Question

Quizplus · Accepted Answer

When the marginal cost of pollution abatement is different across firms, fixed-percentage reductions in pollution will result in some firms having to bear higher costs to meet the requirements, while others may find it easier and cheaper to comply. This makes such regulations inefficient as they do not account for differences in marginal abatement costs.

If the Marginal Cost of Pollution Abatement Is Different Across