Figure 9.6 -A Firm That Generates Pollution Is Illustrated in Figure 9.6

question 14

Multiple Choice

Figure 9.6
-A firm that generates pollution is illustrated in Figure 9.6. Suppose the government is considering changing the pollution tax from P3 to P2. That new policy would

• A)increase the marginal benefit to firms of abating, and thus encourage greater abatement.
• B)increase the marginal benefit to firms of abating, causing them to generate more pollution.
• C)reduce the marginal benefit to firms of abating, causing them to generate more pollution.
• D)reduce the marginal benefit to firms of abating, and thus encourage greater abatement.