1.7. Many observers believe that the levels of pollution in our economy are too high.

a. If society wishes to reduce overall pollution by a certain amount, why is it efficient to have different amounts of reduction at different firms?

b. Command-and-control approaches often rely on uniform reductions among firms. Why are these approaches generally unable to target the firms that should undertake bigger reductions?

c. Economists argue that appropriate Pigovian taxes or tradable pollution rights will result in efficient pollution reduction. How do these approaches target the firms that should undertake bigger reductions?