The Diagram Below Shows the Marginal Cost of Pollution Abatement

question 72

Multiple Choice

The diagram below shows the marginal cost of pollution abatement for two firms, Firm X and Firm Y. FIGURE 17- 4
-Refer to Figure 17- 4. Ignore the horizontal line at t. If the government wanted to impose an emissions tax, efficiency requires that it

• A) impose the same tax on both firms and also fix the amount of pollution abatement at QR for each firm.
• B) tax only the low- cost firm (Firm
• X) and fix the amount of pollution abatement for the high- cost firm (Firm
• Y).
• C) choose a different tax rate for each firm so that each firm abates QR units of pollution.
• D) levy a tax at the same rate to both firms.
• E) tax only the high- cost firm (Firm
• Y) and fix the amount of pollution abatement for the low- cost firm (Firm

---

Definitions:

Doctor Treats

involves the actions and procedures performed by physicians to care for and manage the health conditions of their patients.

Third Party

An entity or individual that is not directly involved in a legal agreement or contract but may be affected by its outcomes or has an indirect interest in it.

Camera

A device used to capture images or videos, consisting of a lens and a body that records visual information on a medium or sensor.

Trespass to Chattels

A legal term referring to the intentional interference with someone else's personal property without permission.