The socially optimal amount of pollution occurs where the marginal social benefit of pollution is _____ the marginal social cost of pollution.
A)equal to
B)greater than
C)less than
D)There is no socially optimal amount of pollution.

Question

Quizplus · Accepted Answer

The socially optimal amount of pollution occurs where the marginal social benefit (MSB) of pollution is equal to the marginal social cost (MSC) of pollution. At this point, the total benefits to society from the pollution (i.e. the MSB) are equal to the total cost of the pollution to society (i.e. the MSC). This is the point where the net benefit of the pollution is maximized and where the costs of the pollution are not greater than the benefits. Therefore, the amount of pollution that corresponds to the point where the MSB is equal to the MSC is the socially optimal amount of pollution.

The Socially Optimal Amount of Pollution Occurs Where the Marginal