Assume that large firms can reduce pollution emissions more cheaply than small firms.A fixed-percentage reduction in pollution emissions would therefore
A) penalize large and small firms equally.
B) penalize large firms more.
C) ensure the reduction in pollution was achieved at the lowest cost.
D) penalize smaller firms more.
E) ensure that for the amount spent,the largest reduction in pollution was gained.

Question

Quizplus · Accepted Answer

A fixed-percentage reduction in pollution emissions would penalize smaller firms more because they typically have higher costs per unit of pollution reduction compared to larger firms.

Assume That Large Firms Can Reduce Pollution Emissions More Cheaply