Economics · Environmental Economics and Market Instruments
Assertion (A): Cap-and-trade carbon markets are generally more cost-effective than command-and-control environmental regulations. Reason (R): Carbon markets enable firms with low abatement costs to sell excess permits to firms facing higher abatement costs, minimizing total economy-wide compliance costs. Choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct, and R is the correct explanation of A✓
- 2Both A and R are correct, but R is not the correct explanation of A
- 3A is correct, but R is incorrect
- 4A is incorrect, but R is correct
Correct answer
Both A and R are correct, and R is the correct explanation of A
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