In Many Cases Selling Pollution Permits Is a Better Method

question 515

Multiple Choice

In many cases selling pollution permits is a better method for reducing pollution than imposing a corrective tax because

• A) it is hard to estimate the market demand curve and thus charge the "right" corrective tax.
• B) selling pollution permits create a net increase in pollution.
• C) Corrective taxes distort incentives.
• D) Corrective taxes provide greater flexibility to firms that can reduce pollution at a low cost.

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Definitions:

Industrial

Pertaining to production or manufacturing environments, often involving heavy machinery and equipment.

Auxiliary Equipment

Equipment that supports the primary operation of a system but is not the main component, often providing additional functionality or safety.

Control Contacts

Components in electrical devices that make or break the electrical connection, often used in relays, switches, and circuit breakers to control the flow of electricity.

Manual Motor Starters

Devices designed to manually switch on and off motors while providing overload protection to prevent motor damage.