Exhibit 17-4

-Which of the following could not have caused the increase in demand indicated in Exhibit 17-4?
A)new firms located on the river
B)the pollution was discovered to be more hazardous than had previously been supposed
C)the cost of pollution abatement equipment rose
D)consumers wanted to buy more of the good produced by the polluters
E)the government subsidized firms so they could better afford to buy pollution rights

Question

Exhibit 17-4

-Which of the following could not have caused the increase in demand indicated in Exhibit 17-4?
A)new firms located on the river 
B)the pollution was discovered to be more hazardous than had previously been supposed 
C)the cost of pollution abatement equipment rose 
D)consumers wanted to buy more of the good produced by the polluters 
E)the government subsidized firms so they could better afford to buy pollution rights

Quizplus · Accepted Answer

If pollution is discovered to be more hazardous, it would likely lead to a decrease in demand for pollution rights, not an increase, as firms or consumers would want to reduce pollution rather than increase it.

Exhibit 17-4 -Which of the Following Could Not Have Caused the Increase