The Diagram Below Shows the Marginal Cost of Pollution Abatement

question 21

Multiple Choice

The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y. FIGURE 17-4
-Refer to Figure 17-4.Suppose the government requires each firm to reduce pollution by the same amount,Q_R.The result will be

• A)fair and just because both firms are facing the same requirements.
• B)economically inefficient because Firm X is not producing as much pollution as Firm Y and therefore should not be faced with the same requirements.
• C)economically efficient because even though their marginal costs of abatement differ,the marginal cost for the last unit of abatement is equal.
• D)economically inefficient because Firm Y is then abating pollution at a higher marginal cost than Firm X.
• E)economically efficient because the maximum amount of pollution will be abated.

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Definitions:

Discrete Random

Refers to a type of variable that can take only specific, separate values, often counted integers, within a defined set.

Distribution

Refers to the way values are spread or distributed over a range of possibilities.

Random Variable

A quantity whose value is subject to variations due to chance (statistical randomness).

Numerical Description

The summary or representation of data through numbers, including measures of central tendency and variability.