Compared to a pollution tax, a policy of uniform abatement with permits is
A) less efficient.
B) more efficient.
C) exactly as efficient.
D) either more or less efficient depending on the number of firms affected.

Question

Quizplus · Accepted Answer

A policy of uniform abatement with permits is less efficient compared to a pollution tax because it does not allow for the flexibility in abatement costs across different firms. A pollution tax allows firms with lower abatement costs to reduce pollution more, leading to a more cost-effective overall reduction.

Compared to a Pollution Tax, a Policy of Uniform Abatement