Command and control (sometimes called direct control) is when the government passes legislation specifically regulating an activity, typically because the activity leads to market failure. Classify each statement about this type of regulation as either true or false. Classify each statement.
True False
Answer Bank
1. Under command and-control regulation, the government has the option to specify the technology that firms must use in production.
2. Command-and-control situations are always the best option when it comes to reducing the amount of pollution.
3. Command and control is more flexible than market based regulation.

This is because the government often states the technology throughout the command and control legislation which the companies should use in the manufacturing.

2. This statement is false.

This is because laws on command and control are still not effectively enforced to reduce pollution, and there are therefore numerous deficiencies.

3. This statement is false.

This is because command and control are often not versatile, since all polluters require the same technology to control pollution and the same standards. It doesn't distinguish between the companies that find it easy or expensive to meet pollution standards.