The Diagram Below Shows the Marginal Costs of Pollution Abatement

question 10

Multiple Choice

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
FIGURE 17-5
-Refer to Figure 17-5.Suppose the government requires that each firm abate pollution to the level Q 3.The outcome would be efficient because

• A)the marginal costs of abatement are equated for the two firms.
• B)the maximum amount of pollution is being abated at the lowest cost.
• C)the marginal cost and marginal benefit of pollution abatement are equated.
• D)all of the above.
• E)none of the above; the outcome would be inefficient.

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