A tradable permit system: is difficult to implement because regulators do not kn

Question

A tradable permit system: is difficult to implement because regulators do not know the marginal abatement costs of every company. achieves a given amount of pollution reduction at the least cost because firms with lowest marginal abatement costs do the majority of the pollution reduction. increases pollution because the government gives firms permits that grant them the right to pollute. requires that each firm reduce its pollution by the same amount. A tradable permit system: is difficult to implement because regulators do not know the marginal abatement costs of every company. achieves a given amount of pollution reduction at the least cost because firms with lowest marginal abatement costs do the majority of the pollution reduction. increases pollution because the government gives firms permits that grant them the right to pollute. requires that each firm reduce its pollution by the same amount.

Explanation / Answer

Part b . A tradable permit system allows firms to control pollution by achieving reductions in their emission of pollution through provision of limited permit to discharge pollutants per time period like selecting a least cost combination with lowest marginal abatement cost .

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