Tradable Pollution Permits

question 446

Multiple Choice

Tradable pollution permits

• A)have prices that are set by the government.
• B)will be more valuable to firms that can reduce pollution only at high costs.
• C)are likely to create a higher level of total pollution.
• D)are less desirable than command-and-control policies to reduce pollution.

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Definitions:

Pharmaceutical Company

A commercial business that researches, develops, makes, and sells pharmaceutical drugs and treatments.

Average Revenue

The total revenue divided by the quantity sold, representing the amount of revenue generated per unit of output sold.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.

Natural Monopoly

A market situation where due to high fixed costs or unique production processes, one provider can supply a product or service more efficiently than multiple competitors.