When Using the Economic Efficiency Approach to Control Air and Water

Multiple Choice

When using the economic efficiency approach to control air and water pollution,the government _____

A) forces each firm to produce emissions in the most cost-efficient manner irrespective of its cost structure.
B) offers each firm the flexibility to reduce emissions in the most cost-effective manner, given its unique cost structure.
C) offers each firm the option of choosing between the cost-minimizing emission level and the profit-maximizing emission level.
D) provides each firm with fixed rules for reducing pollution.
E) offers each firm the option of using either total cost pricing or average cost pricing when determining the optimum emission level.