When Considering an Entire Industry,the Marginal Benefit of Reducing Pollution

question 130

Multiple Choice

When considering an entire industry,the marginal benefit of reducing pollution is expected

• A)to rise as the level of pollution gets closer to zero.
• B)to remain constant for all levels of pollution control.
• C)to exceed the marginal cost of pollution abatement for all positive levels of pollution.
• D)to fall as the amount of pollution abatement rises.
• E)to be always greater than the marginal cost of pollution reduction.

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Definitions:

Face Value

The nominal value printed on a bond or security which indicates its worth at maturity but does not necessarily reflect its market value.

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay its shareholders and debt holders, weighted according to the proportion of equity and debt in the company's capital structure.

Return on Equity

A financial ratio indicating the profitability of a company relative to its shareholders' equity, calculated as net income divided by shareholders' equity.

Weighted Average Cost of Capital (WACC)

A calculation of a firm's cost of capital in which each category of capital (debt, equity, etc.) is proportionately weighted, representing the average rate that a company is expected to pay for all its financing sources.