When Comparing a System of Emission Taxes to a System

Multiple Choice

When comparing a system of emission taxes to a system of tradable pollution permits,the same amount of pollution could be abated in each as long as

A) the marginal cost of abatement was equal across all firms.
B) the marginal benefit of abatement curve was horizontal.
C) the emission tax rate,t,was applied equally to all firms.
D) the cap on emissions was chosen such that the equilibrium price of the permits, ,could rise over time.
E) the cap on emissions was chosen such that the equilibrium price of the permits, ,was equal to the emissions tax rate,t.