Under the command-and-control regulation,the supply curve for the polluting good will shift downward by a larger amount than it would with a tax regulation.

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Command-and-control regulations typically mandate specific limits or technology standards for pollution reduction, which can increase production costs for firms, potentially shifting the supply curve upward or reducing supply. In contrast, a tax regulation internalizes the externality cost, leading to a more efficient outcome without necessarily increasing production costs as significantly.

Under the Command-And-Control Regulation,the Supply Curve for the Polluting Good