Which of the following is a more efficient way to lower pollution than a command-and-control policy?
A) production subsidies
B) antitrust policy
C) marketable pollution permits
D) cost regulation

Question

Quizplus · Accepted Answer

Marketable pollution permits, also known as cap-and-trade, provide a market-based solution to pollution reduction. The government sets a limit (or cap) on the amount of pollution that can be emitted and then issues permits to firms that allow them to emit a certain amount of pollution. Firms that can reduce their pollution below their allotted amount can sell their excess permits to other firms that exceed their limits. This creates a financial incentive for firms to reduce their pollution levels and rewards those that can do so efficiently. It also ensures that the overall pollution level stays within the government-set limit. This approach is considered more efficient than a command-and-control policy because it provides flexibility and encourages innovation in pollution reduction technologies.

Which of the Following Is a More Efficient Way to Lower