Under the Clean Air Act of 1990, the EPA distributes pollution allowances to generators of electricity, and firms trade allowances as they see fit. The EPA's tradeable allowances program has resulted in:
A) air quality that is neither improved nor worsened.
B) an improved air quality.
C) a worsening in air quality.
D) a less efficient market outcome.

Question

Quizplus · Accepted Answer

The EPA's tradeable allowances program has incentivized firms to reduce their emissions and invest in cleaner technologies in order to trade or sell their excess allowances, leading to an overall improvement in air quality.

Under the Clean Air Act of 1990, the EPA Distributes