A uniform-abatement policy is
A) inefficient because it does not exploit the differences in abatement costs among firms.
B) efficient because an equal amount of pollution is assigned to each firm.
C) inefficient because it incurs relatively low compliance costs.
D) efficient because it helps firms lower their production costs.

Question

Quizplus · Accepted Answer

A uniform-abatement policy treats all firms equally in terms of the amount of pollution they are allowed to emit, regardless of their individual abatement costs. This means that some firms may be able to reduce pollution at a lower cost than others, but are forced to bear the same burden as firms with higher abatement costs. As a result, firms with lower abatement costs will reduce their pollution levels less than they would under a more flexible policy, while firms with higher abatement costs will reduce their pollution levels more than they would under a more flexible policy. This can lead to inefficiencies and higher overall costs.

A Uniform-Abatement Policy Is