Economics 9708 · AS & A Level · Taxes and subsidies

Taxes and subsidies — practice question

What is one benefit of pollution permits, relative to an alternative policy of taxes charged on the quantity of pollutants emitted by firms?

  • Afirms cannot sell any surplus permits
  • Bno monitoring of firms’ emissions is required
  • Cpollution levels can be reduced to zero
  • Dthe reduction in the level of pollution is more predictable

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