Many States Use Container Redemption Programs to Encourage Reuse of Glass

question 78

Multiple Choice

Many states use container redemption programs to encourage reuse of glass bottles and other recyclable containers. Suppose a state has a current redemption program that imposes a 10-cent per container fee, and then the state increases the fee to 15 cents per container. What is the expected impact of this change on the optimal quantity of unredeemed (scrapped) containers?

• A) Optimal quantity increases.
• B) Optimal quantity decreases.
• C) Optimal quantity remains unchanged.
• D) We cannot determine the outcome of this policy change without having more information.

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