The initial allocation of tradeable pollution permits will affect the level of economic efficiency in a market with a pollution externality.

Name: The initial allocation of tradeable pollution permits will affect the level of economic efficiency in a market with a pollution externality.
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Question

Quizplus · Accepted Answer

The initial allocation of tradeable pollution permits does not affect economic efficiency because permits can be traded, allowing the market to reach an efficient outcome regardless of the initial distribution.

The Initial Allocation of Tradeable Pollution Permits Will Affect the Level