Question

In order to reduce the harmful affects of recession and carbon emissions, the government provided tax incentives for manufacturing firm's to ____________ that provide alternative, more efficient methods of combining inputs to produce output.A. create perfect competition between firmsB. maintain constant returns to scaleC. increase the returns to scaleD. acquire energy efficient production technologies

Answer 1

Answer:

The correct answer is option D.

Explanation:

In order to reduce the effect of recessions and carbon emissions, the government provides a tax incentive to the manufacturing firms. This tax incentive is provided so that the firms adopt more energy-efficient production technologies, such that available resources are used in a more efficient way to produce output. This will help in the reduction of carbon emissions.  

A reduction in tax rates will also lead to an increase in production as the cost of production will decline.