The Least-Cost Solution for the Distribution of Pollution Abatement Among

question 158

Multiple Choice

The least-cost solution for the distribution of pollution abatement among polluters is

• A) a 10% reduction for all.
• B) a fixed-percentage reduction for all.
• C) for large reductions from the largest polluters.
• D) for large reductions from the smallest polluters.
• E) when the marginal cost of abatement is the same across all polluters.

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Definitions:

Marginal Cost

The expense incurred in creating an extra single unit of a product or service.

Price Elasticity

A metric that determines how the demand for a certain good fluctuates with its price adjustments.

Marginal Revenue

The additional income that an organization receives from selling one more unit of a good or service.

Profit Maximizing

The process or strategy by which a firm adjusts its production to achieve the highest possible profit.