Question: True or False: The cost savings achieved by using a market-based mechanism (e.g., a pollution tax, a cap-and-trade program) to reduce pollution instead of a

True or False: The cost savings achieved by using a market-based mechanism (e.g., a pollution tax, a cap-and-trade program) to reduce pollution instead of a command-and-control policy (e.g., technology mandates, performance standards) are likely to be greater in settings where the polluting firms are very diverse (e.g., they have very different production technologies; they use a wide-variety of different inputs; they produce different final goods) as opposed to settings where the polluting firms are identical

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