Why is the use of the permits more efficient than regulation

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Reference no: EM13886861

Why is the use of the permits more efficient than the regulation requiring each firm to reduce pollution by one unit?

a) because the firms that are most efficient at reducing pollution are the ones that do so with the permits

b) because the government sets the price for the permits

c) because the polluters internalize the cost of the externality

d) because pollution imposes a social cost

Reference no: EM13886861

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