One Advantage of Allowing a Market for Pollution Permits to Control

Multiple Choice

One advantage of allowing a market for pollution permits to control the total amount of pollution released in an area is that:

A) the government knows exactly how much each firm is allowed to pollute
B) government revenue from the sale of permits is greater than revenue from a Pigovian tax
C) the initial allocation of permits to firms does not affect the efficiency of the market
D) firms will work together to eventually eliminate pollution