The least expensive way to clean up the environment is for all firms to reduce pollution by an equal percentage.

Question

Quizplus · Accepted Answer

The least expensive way to clean up the environment is not necessarily for all firms to reduce pollution by an equal percentage because different firms have different costs associated with reducing pollution. Some firms can reduce pollution more cheaply than others, so a more cost-effective approach is to allow those firms to make larger reductions. This can be achieved through mechanisms like pollution permits or taxes that let firms with lower abatement costs reduce more pollution, leading to a more efficient overall reduction in pollution.

The Least Expensive Way to Clean Up the Environment Is