Some firms want to be environmentally friendly, even if greener production processes increase their costs. Consider two

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Some firms want to be environmentally friendly, even if "greener" production processes increase their costs. Consider two scenarios. In the first scenario, a "green" firm such as a renewable energy company is producing electricity. This is the same good that is being produced by a number of other, dirtier companies such as coal-fired power plants. It is impossible for consumers to determine whether the good that they are using, the electricity from their wall outlet, came from the green firm or the dirtier firms. In the second scenario, such as organic agriculture, it is possible for consumers to distinguish between the green firm and the dirtier firms. In which scenario is the green firm more likely to be successful? Why?
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The Economics Of The Environment

ISBN: 9780321321664

1st Edition

Authors: Peter Berck, Gloria Helfand

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