Which of the Following Statements Is True About the Optimal

question 105

Multiple Choice

Which of the following statements is true about the optimal quantity of pollution?

• A) It equals zero.
• B) Pollution abatement should continue up to the point where marginal cost equals the average total cost.
• C) Trade-offs exist between producing a cleaner environment and producing other goods and services.
• D) Firms should be allowed to determine the profit-maximizing amount of pollution abatement.

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Definitions:

Avoidable Fixed Costs

Fixed costs that can be eliminated if a particular business segment or operation is discontinued.

Idle Capacity

Unused or unutilized production capacity within a business, often leading to inefficiency and increased costs.

Constrained Resource

A limited resource that restricts a company's ability to meet demand, such as limited machine time or labor hours.

Automated Factory

An automated factory utilizes advanced machinery and computer systems to perform tasks with minimal human intervention, increasing efficiency and production.