Legislation requiring domestic manufacturers to install pollution abatement equipment tends to promote:
A) Higher production costs and an increase in output
B) Higher production costs and a decrease in output
C) Lower production costs and an increase in output
D) Lower production costs and a decrease in output

Question

Quizplus · Accepted Answer

Legislation requiring domestic manufacturers to install pollution abatement equipment increases their production costs as they have to invest in new equipment and technology. This leads to higher prices for their products, reducing demand and output in the market. Thus, the correct option is higher production costs and a decrease in output (Option B).

Legislation Requiring Domestic Manufacturers to Install Pollution Abatement Equipment Tends