1.) Perfectly elastic demand for a given good means that: Please choose one:

a.) There is no such thing as "perfectly elastic demand".

b.) The demand curve is horizontal. Any increase in the price leads the quantity demanded to fall to zero and any reduction in the price leads to an infinite quantity demanded.

c.) The demand curve is vertical. Any increase or decrease in the price will not have any effect of the quantity demanded.

2.) Under emission taxes polluters:

a.) Are incentivized to innovate and reduce their marginal abatement cost since it will lead to reduction of total abatement costs.

b.) Are incentivized to innovate and reduce their marginal abatement cost since it will lead to reduction of both the total abatement costs and the tax burden.

c.) Are incentivized to innovate and reduce their marginal abatement cost since it will lead to reduction of total tax burden.