Taxes are a more effective method of controlling pollution than environmental standards because:
A)standards allow greater flexibility.
B)standards require less information.
C)standards never require the efficient level of output.
D)taxes encourage reducing pollution at minimum cost.

Question

Quizplus · Accepted Answer

Taxes provide an incentive for firms to reduce pollution at the minimum cost. This is because firms that can reduce their pollution at a lower cost will pay less in taxes, while firms that find it difficult to reduce pollution will have to pay more. Environmental standards, on the other hand, may allow for greater flexibility and may require less information, but they do not necessarily ensure that pollution is reduced at the lowest possible cost.

Taxes Are a More Effective Method of Controlling Pollution Than