What is the difference between command-and-control policies and market-based policies toward externalities?

Command & Control are regulatory mechanisms. Market Based Policies are incentive based mechanisms.

Explanation:

Command & Control ; Market Based Policies - are approaches used to solve the market failure from Externalities (Eg: Negative Externality - Pollution).

Command & Control : implies setting maximum ceiling limit of releasing negative externality (eg - harmful pollutant gases, here) by all individual firms. As mentioned, it has regulation in its essence.

Market Based Policies : imply setting of maximum ceiling limit for 'all as a whole' & allowing them to trade permits for releasing - harmful pollutant gases. Here; the opportunity control of each emission is - lost extra tax paid, lost subsidy, lost price at which that emission could be sold in market.

So, externality reduction in this case is not owing to any regulation, but self incentive of monetary gain in this case.

the correct option is c

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.