Which Statement Explains the Difference Between Command and Control Policies

Multiple Choice

Which statement explains the difference between command and control policies and tradable allowances?

A) Command and control policies are a government solution to externalities, whereas tradable allowances are a type of private market solution.
B) Tradable allowances allow for less flexibility than command and control policies.
C) Command and control policies require all firms to reduce pollutants by a specific quantity, whereas tradable allowances allow some firms to pollute more than others by trading for pollution rights.
D) Tradable allowances sometimes result in higher overall levels of pollutants because firms can simply purchase the rights to pollute more, whereas the quantity of pollution is fixed under command and control.