The Marginal Cost of Pollution Is MC = 2Q, While

question 29

Multiple Choice

The marginal cost of pollution is MC = 2Q, while the marginal abatement cost is MAC = 12 - Q. Government regulators incorrectly estimate the marginal abatement cost at MAC_E = 9 - Q. The level of pollution, measured in tons of glop, is Q. If the government taxes each ton of glop based on the incorrect estimate of the marginal abatement cost, ____ units of pollution will be omitted.

• A) 3
• B) 4
• C) 5
• D) 6

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