Which of the Following Statements Is Not Correct

Multiple Choice

Which of the following statements is not correct?

A) Tradable pollution permits have an advantage over corrective taxes if the government is uncertain as to the optimal size of the tax necessary to reduce pollution to a specific level.
B) Both corrective taxes and tradable pollution permits provide market-based incentives for firms to reduce pollution.
C) Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution.
D) Both corrective taxes and tradable pollution permits reduce the cost of environmental protection and thus should increase the public's demand for a clean environment.