Emission taxes create efficiencies by allowing firms with higher costs of pollution to pollute more.

Name: Emission taxes create efficiencies by allowing firms with higher costs of pollution to pollute more.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Emission taxes incentivize firms with lower costs of pollution abatement to reduce emissions, while firms with higher abatement costs might find it cheaper to pay the tax and continue polluting, leading to a cost-effective allocation of pollution reduction efforts across firms.

Emission Taxes Create Efficiencies by Allowing Firms with Higher Costs