Why Is the Optimal Quantity of Pollution Not Less Than

question 270

Multiple Choice

Why is the optimal quantity of pollution not less than the point at which the marginal benefit equals the marginal cost?

• A) The point of intersection occurs at a low level of pollution.
• B) There are no external costs below that level.
• C) Below that point firms will have to reduce the quantity that they are currently producing and lower the price.
• D) Below that point the value that people place on less pollution is less than the cost of reducing the pollution.

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