Which of the Following Statements Is TRUE

Multiple Choice

Which of the following statements is TRUE?

A) Mandating that every firm emit no more than X amount of pollutants is the most efficient method of reducing pollution.
B) A system of tradeable allowances increases pollution because firms can pay for the right to pollute.
C) To maximize social surplus, the burden of reducing pollution should be allowed to vary by industry.
D) If the EPA cares about the sum of consumer and producer surplus, they should ignore the impact of pollution reduction on the profitability of firms.