If the Marginal Benefit of Reducing Emissions of Some Air

question 241

Multiple Choice

If the marginal benefit of reducing emissions of some air pollutant is greater than the marginal cost,

• A)further reductions will make society better off.
• B)the marginal benefit will rise and the marginal cost will fall as further reductions are made.
• C)economic efficiency will be achieved when emissions are reduced to zero.
• D)private businesses, rather the consumers, should be made to pay for the cost of further reductions.

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Definitions:

Short Run

A period in which at least one input, such as plant size or capital equipment, in the production process is fixed.

Long Run

A period in economic theory during which all inputs can be adjusted by firms, allowing them to fully adapt to changes in market conditions or to scale their operations.

Sales

The transactions or activities involved in selling goods or services in return for money or other compensation.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, or insurance premiums.