Question

To be effective, U.S. command-and-control environmental regulation required A) social costs of industrial pollution to become...

To be effective, U.S. command-and-control environmental regulation required

A) social costs of industrial pollution to become unavoidable business costs.

B) firms to take the social costs of pollution into account.

C) firms to increase their costs by installing specified anti-pollution equipment.

D) the EPA to oversee all environmental laws and all of the above.

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Answer #1

Correct Answer:           

D

Explanation:

Under the command and control regulation system, it is the environmental protection agency that looks after the implementation and compliance of all the regulations dedicated to the environmental protection. As per this regulation, the firms has to bring ant-pollution system in their setup and it makes them to consider the social cost in before taking of output and pricing decisions. As a result, the social cost cannot be avoided by these firms.

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