For a fixed-percentage reduction in pollution emissions to be economically efficient,it would have to be the case that
A) the marginal cost of pollution control is the same for all firms.
B) enforcement is vigorous.
C) the marginal cost of pollution control varies wildly across firms.
D) large polluters reduce emissions by more than small polluters.
E) small polluters reduce emissions by more than large polluters.

Question

Quizplus · Accepted Answer

If the marginal cost of pollution control is the same for all firms, then a fixed-percentage reduction in pollution emissions will have the same impact on all firms. This ensures that the reduction is achieved at the lowest possible cost to society as a whole, as firms will only invest in pollution control measures that are cost-effective for them. Enforcing the reduction and ensuring that large and small polluters reduce emissions by the same percentage would also contribute to economic efficiency, but these factors are not sufficient on their own.

For a Fixed-Percentage Reduction in Pollution Emissions to Be Economically