Direct pollution controls are usually inefficient because, for any given amount of pollution reduction, they

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Quizplus · Accepted Answer

Direct pollution controls do not minimize the total cost of pollution abatement. This is because they do not take into account differing marginal costs among firms, and instead impose the same level of pollution reduction on all firms. This can result in some firms incurring a higher cost than necessary to abate their pollution, while others incur a lower cost. Market-based instruments, such as cap and trade or taxes, provide economic incentives for firms to abate pollution at the lowest cost possible, thereby minimizing the total cost of pollution abatement.

Direct Pollution Controls Are Usually Inefficient Because, for Any Given