The Diagram Below Shows the Marginal Costs of Pollution Abatement

question 92

Multiple Choice

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2. FIGURE 17-5
-Refer to Figure 17-5.Suppose each firm is currently abating pollution to the level .Which of the following statements is true?

• A)This outcome is efficient because both firms are abating the same amount.
• B)This outcome is not allocatively efficient because the marginal benefits and marginal costs of abatement are not equated.
• C)This outcome is not allocatively efficient because less than 100% abatement is being achieved.
• D)This outcome is not productively efficient because one firm is abating more pollution than the other.
• E)This outcome is not productively efficient because the total cost of achieving this level of abatement is not minimized.

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