Question

True or false: if society wishes to reduce overall pollution by a certain amount, it is efficient to have firms with highest profit bearing the largest burden of reducing pollution and firms with lowest profit bearing the least burden.

Answer 1

TRUE

If the society wishes to reduce overall pollution by certain amount, it is efficient to have firms with highest profit bearing the largest burden of reducing pollution and firms with lowest profit bearing the least burden. This is because it will not lead to overall burden on the small firms. If large firms and small firms were to reduce the pollution burden on same rate then it will be very costly for the smaller firms to bear that and it will be a burden of cost on smaller firms.