Which of the following statements is true about the marketable pollution permits?

Question

Quizplus · Accepted Answer

The Coase theorem states that if property rights are well-defined and transaction costs are low, then the efficient outcome will be achieved regardless of the initial allocation of property rights. In the case of marketable pollution permits, the efficient outcome is the one that minimizes the total cost of pollution abatement. This outcome can be achieved through trading of permits, where firms that can abate pollution at a lower cost will sell permits to firms that can abate pollution at a higher cost. All parties engaged in trading will become as well off or better off from trade, except the government, which will not receive any revenue from the sale of permits.

Which of the Following Statements Is True About the Marketable