If a government chooses a system of marketable permits as its environmental managing tool, the reduction in pollution will
A) take place in the firms where it is least expensive to do so.
B) take place in every firm within the time set by the permit.
C) be initiated at the household level.
D) be rewarded with refundable charges.

Question

Quizplus · Accepted Answer

Marketable permits allow firms to buy and sell the right to pollute, leading to pollution reduction where it is most cost-effective. Firms with lower costs of reducing pollution will sell their permits to those with higher costs, ensuring that reductions occur where they are cheapest.

If a Government Chooses a System of Marketable Permits as Its