Tradable permits are useful in allocating common resources because:
A)the depletion of common resources imposes a negative externality.
B)the problem of overconsumption can be addressed.
C)the socially optimal quantity is not the same as the individual consumer's optimal quantity.
D)All of these are true.

Question

Quizplus · Accepted Answer

Tradable permits help manage the depletion of common resources by addressing negative externalities, curbing overconsumption, and aligning individual consumption with socially optimal quantities.

Tradable Permits Are Useful in Allocating Common Resources Because