Figure 10-15 -Refer to Figure 10-15. Which of the following is not necessary in order for the corrective tax and pollution permit to have equivalent effects? A)P^B must be equivalent to the corrective tax. B)Q^A must be equivalent to the amount of pollution allowed to the pollution permit holders. C)The equilibrium price and quantity of pollution must be the same in both graphs. D)The amount of pollution emitted by each firm must be the same.

Question

Quizplus · Accepted Answer

The amount of pollution emitted by each firm does not necessarily have to be the same for the corrective tax and pollution permit to have equivalent effects. As long as the total amount of pollution allowed is the same in both cases, the outcomes will be equivalent.

Figure 10-15 -Refer to Figure 10-15. Which of the Following Is Not