A Tradable Permit System

Multiple Choice

A tradable permit system:

A) requires that each firm reduce its pollution by the same amount.
B) is difficult to implement because regulators do not know the marginal abatement costs of every company.
C) achieves a given amount of pollution reduction at the least cost because firms with lowest marginal abatement costs do most of the reduction.
D) increases pollution because the government gives firms permits that grant them the right to pollute.