The Socially Optimal Level of Pollution Control Occurs Where the Marginal

question 19

Multiple Choice

The socially optimal level of pollution control occurs where the marginal:

• A) benefit of pollution control is zero.
• B) cost of pollution is minimized.
• C) cost of pollution control equals the marginal cost of pollution.
• D) cost of pollution control is minimized.
• E) cost of pollution control equals the marginal benefit of pollution.

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Definitions:

Required Rate Of Return

The rate that is generally based on the company’s cost of capital.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to production.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since its acquisition, reflecting its loss in value over time.