When tradable allowances are used to correct negative externalities in a market,the outcome:
A) limits the quantity bought and sold to the efficient level.
B) maximizes surplus.
C) is efficient.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

Tradable allowances limit the quantity bought and sold to the efficient level, which maximizes surplus and is efficient. Therefore, all of the statements are true.

When Tradable Allowances Are Used to Correct Negative Externalities in a Market,the