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If the environmental regulator is uncertain about firms' abatement costs, it is said that an emissions tax approach can control the marginal abatement cost but
If the environmental regulator is uncertain about firms' abatement costs, it is said that an emissions tax approach can control the marginal abatement cost but not the quantity of abatement, whereas a cap-and-trade approach can control the quantity of abatement but not the marginal abatement cost. Use a carefully drawn and clearly labelled diagram and explain why this statement is correct
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