Figure 10-10 -Refer to Figure 10-10.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 corrective tax and pollution permit can have equivalent effects even if the amount of pollution emitted by each firm is different as long as the total amount of pollution allowed is the same. This is because the system aims to reduce overall pollution levels, not necessarily individual firm emissions. Therefore, the correct answer is D, as it is not necessary for the amount of pollution emitted by each firm to be the same for the two systems to have equivalent effects. The other three factors listed in the answer choices are necessary for equivalence between the two systems.

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