In Economic Analysis, the Optimal Level of Pollution

question 165

Multiple Choice

In economic analysis, the optimal level of pollution

• A) is always zero.
• B) arises at the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.
• C) occurs at the point at which demand crosses the private cost supply curve.
• D) should be determined by the private market without any government intervention.

---

Definitions:

Positive Profit

Positive Profit occurs when the total revenue of a business exceeds its total costs.

Total Revenue

Total Revenue refers to the total receipts from sales of goods or services by a firm over a specified period.

Variable Costs

refer to expenses that change in proportion to the activity of a business, such as costs for raw materials or production volume.

Fixed Costs

Costs that do not change with the level of output produced, such as rent or salaries.