A command-and-control policy causes firms to use inefficient abatement technologies,so production costs will be higher than they would be under a pollution tax.

Question

Quizplus · Accepted Answer

A command-and-control policy requires firms to use specific technologies to reduce pollution, which may not be the most efficient or cost-effective method. This leads to higher production costs compared to a pollution tax, which provides firms with the flexibility to choose the most cost-effective abatement technology. Therefore, A is the correct answer.

A Command-And-Control Policy Causes Firms to Use Inefficient Abatement Technologies,so