The Optimal Level of Pollution Occurs Where the Marginal Social

question 48

Multiple Choice

The optimal level of pollution occurs where the marginal social benefit is equal to

• A)marginal private cost, which equals marginal social cost plus marginal external cost
• B)marginal social cost, which equals marginal private cost plus marginal external cost
• C)marginal external cost, which equals marginal private cost plus marginal social cost
• D)marginal private cost, which equals marginal social cost plus marginal internal cost
• E)marginal social cost, which equals marginal private cost plus marginal internal cost

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Definitions:

Total Revenue

The total amount of money that is brought in by sales of goods or services.

Total Cost

The complete cost of production, encompassing both fixed and variable costs.

Marginal Revenue

The incremental revenue acquired by a business upon selling one more unit of a good or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average amount spent on variable costs per unit of output.