Which Is NOT an Advantage of Emissions Fees Over Standards

question 19

Multiple Choice

Which is NOT an advantage of emissions fees over standards?

• A) Fees can give a firm the incentive to reduce emissions below the standard when new technology allows.
• B) Fees can reduce the cost of attaining some goal level of emissions when firms all have the same abatement costs.
• C) Fees can reduce the cost of attaining some goal level of emissions when firms have different abatement costs and different standards can be assigned to different firms.
• D) Fees can reduce the cost of attaining some goal level of emissions when firms have different abatement costs and different standards cannot be assigned to different firms.
• E) Fees may provide an incentive for a firm to investigate emissions-reduction technology that will reduce emissions below existing standards.

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Definitions:

Spinoff

A spinoff occurs when a company creates an independent entity by detaching a portion of its business, assets, or division, distributing shares of the new entity to its current shareholders.

Divest

The act of selling off assets or divisions of a company for financial or strategic reasons.

Failing Business

A business that is unable to continue operating due to financial difficulties, leading to bankruptcy or liquidation.

Economic Failures

Situations where market outcomes lead to inefficiency, often resulting in resources not being allocated optimally.