The Optimal Level of Pollution Is

question 180

Multiple Choice

The optimal level of pollution is

• A)zero
• B)the level at which the marginal social cost of air quality equals the marginal social benefit
• C)the level at which the average social cost of air quality equals the average social benefit
• D)the level at which the total social cost of air quality equals the total social benefit
• E)the level at which the marginal social cost of air quality is minimized

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Definitions:

Dominant Firm

A company that has a large majority share of the market and can significantly influence the market price and competition.

Market Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and the price of the good.

Profit-maximizing Output

The level of production at which a business achieves the highest possible profit.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide upon independently of each other and at the same time.