Final answer:
The statement is false. Command and control regulation sets specific limits for pollution emissions and/or specific pollution-control technologies that firms must use.
Step-by-step explanation:
The statement is incorrect. Command and control, also known as direct control, is when the government passes legislation specifically regulating an activity. This type of regulation sets specific limits for pollution emissions and/or specific pollution-control technologies that firms must use. It does not apply to all activities; instead, it targets specific areas that require regulation.
For example, command and control regulation can be seen in environmental laws that specify allowable quantities of pollution and require the installation of certain equipment to reduce pollution. However, command and control regulation can be inflexible and may not provide incentives for firms to go beyond the limits or explore innovative ways to reduce pollution.