Why Are Direct Controls for Reducing Pollution Likely to Be

question 78

Multiple Choice

Why are direct controls for reducing pollution likely to be inefficient?

• A)The cost of reducing pollution is greater than the benefit.
• B)Direct controls are impossible to monitor.
• C)Firms with different pollution abatement costs are facing identical regulations.
• D)Firms are not likely to comply with this method of government intervention.
• E)Firms' output will rise above the socially optimal amount.

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Definitions:

Dominance of Markets

A situation where one or few entities exert a disproportionate control over the sales, distribution, or characteristics of goods and services in a market.

Industrial Regulation

The imposition of rules by the government on firms and industries to promote competition, control monopoly power, protect consumers, and regulate prices and service quality.

Production Costs

Expenses incurred in the process of manufacturing or producing goods, including materials, labor, and overhead costs.