Command-and-control policies usually:
A. reduce the production of a polluting good more than do pollution taxes.
B. reduce the production of a polluting good less than do pollution taxes.
C. increase price less than do pollution taxes.
D. decrease the quantity demanded by less than do pollution taxes.
Answer: B
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When firms in an industry are selling similar products, and they agree to share the market,
A) each firm earns a profit even though marginal cost is greater than marginal revenue. B) each firm secures a net revenue about as large as it would have received if it were the only seller. C) they try to keep each firm's price above its marginal cost. D) they tend to produce higher prices and larger output. E) the agreement will enforce itself because none of the firms will have an interest in triggering a competitive struggle.
Regarding the law of supply, which of the following statements is correct?
A) As the price of a good or service rises, the quantity supplied will increase. B) As the price of a good or service rises, the quantity supplied will decrease. C) The ceteris paribus assumption does not apply. D) As demand falls, supply rises.