Pollution permit policies achieve an _____ outcome because

Question

Quizplus · Accepted Answer

Pollution permit policies provide firms with incentives to minimize costs and reduce pollution levels. This is because firms that can reduce their pollution levels at a lower cost can sell their unused permits to other firms that find it more difficult or expensive to reduce their pollution levels. Therefore, firms have an incentive to innovate and explore cost-effective ways of reducing pollution, leading to an efficient outcome.

Pollution Permit Policies Achieve an _____ Outcome Because