When Designing a Policy to Reduce Polluting Emissions,policymakers Are Unlikely

Multiple Choice

When designing a policy to reduce polluting emissions,policymakers are unlikely to know with certainty what the marginal cost of abatement is for each firm.If policymakers set an emissions cap of X units,and issue tradable permits for this amount,then they

A) know what the reduction in emissions will be but not the per-unit cost to firms.
B) know with certainty what the reduction in emissions will be and at what cost.
C) know the per-unit cost imposed on firms but do not know what the reduction in emissions will be.
D) are uncertain about both the amount of emission reduction and the cost.
E) know with certainty what the equilibrium permit price will be.