Addressing Externalities With Public Information
Given that externalities can lead to market failure, which of the following describes a likely market outcome of mandating public disclosure of pollution levels by firms?
A
Consumers may ignore the information and continue purchasing as before, leaving overall pollution unaffected.
B
It may increase accountability and pressure companies to reduce emissions by informing consumers and activists who may exert pressure.
C
It could result in incentives for firms to collude in order to raise industry-wide pollution standards, avoiding substantial changes.
D
Companies promptly see benefits from positive market reaction and adopt cleaner technologies leading to immediate reductions in emissions.
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