When society requires that firms reduce pollution, there is
A)a tradeoff because of reduced incomes to the firms' owners and workers.
B)a tradeoff only if some firms are forced to close.
C)no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements.
D)no tradeoff, since everyone benefits from reduced pollution.

Question

Quizplus · Accepted Answer

There is a tradeoff because implementing measures to reduce pollution often involves costs for firms, which can lead to reduced profits for owners and potentially lower wages or job losses for workers. This reflects the economic principle that resources used for one purpose (e.g., pollution control) are not available for another (e.g., income generation).

When Society Requires That Firms Reduce Pollution, There Is