Refer to the figures below to answer this question:
Cap-and-trade versus emissions fee when marginal social benefits are inelastic and costs are uncertain: Cap-and-trade versus emissions fee when marginal social benefits are elastic and costs are uncertain:
a)In case of an inelastic marginal social benefit curve,what type of pollution reduction system should the government employ? Why?
b)If the social benefit curve is elastic,do you answer change?
c)What are advantages and disadvantages of Cap-and-Trade systems over Emission Fee systems when the inflation and change in marginal costs are considered?

Question

Refer to the figures below to answer this question:
 Cap-and-trade versus emissions fee when marginal social benefits are inelastic and costs are uncertain:  Cap-and-trade versus emissions fee when marginal social benefits are elastic and costs are uncertain: 
a)In case of an inelastic marginal social benefit curve,what type of pollution reduction system should the government employ? Why? 
b)If the social benefit curve is elastic,do you answer change? 
c)What are advantages and disadvantages of Cap-and-Trade systems over Emission Fee systems when the inflation and change in marginal costs are considered?

Quizplus · Accepted Answer

The Answer of Refer to the figures below to answer this question:
 Cap-and-trade versus emissions fee when marginal social benefits are inelastic and costs are uncertain:  Cap-and-trade versus emissions fee when marginal social benefits are elastic and costs are uncertain: 
a)In case of an inelastic marginal social benefit curve,what type of pollution reduction system should the government employ? Why? 
b)If the social benefit curve is elastic,do you answer change? 
c)What are advantages and disadvantages of Cap-and-Trade systems over Emission Fee systems when the inflation and change in marginal costs are considered?

Refer to the Figures Below to Answer This Question