-Under a marketable pollution permit system, property rights to an externality are created so that a more efficient allocation of resources will result.

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Quizplus · Accepted Answer

A marketable pollution permit system assigns property rights to pollute, creating a market for these rights. Firms can buy, sell, or trade these permits, leading to a more efficient allocation of resources as firms that can reduce pollution at lower costs will do so and sell their permits to those for whom reduction is more costly.

-Under a Marketable Pollution Permit System, Property Rights to an Externality