Abatement Subsidies Can Increase Total Emissions When

question 12

Multiple Choice

Abatement subsidies can increase total emissions when

• A) the pollution control technology supported by the subsidy is outdated
• B) the number of polluting firms entering the industry increases to gain the subsidies
• C) marginal abatement costs decrease while marginal damages remain the same
• D) marginal damages decrease while marginal abatement costs remain the same

---

Definitions:

Inspects

The action of examining something or someone closely to ensure compliance with standards.

Obligation

A commitment or duty to do something or to refrain from doing something.

Merchant

A person or company involved in the wholesale or retail trade of goods or services.

Rejection

The refusal to accept an offer or proposal.