-Refer to the above figure. Suppose the marginal benefit and the marginal cost curves of pollution abatement are normally shaped. Suppose the equilibrium is for a factory in Los Angeles. What would happen if the same factory were in the middle of Nevada?

Question

Quizplus · Accepted Answer

The marginal benefit of pollution abatement is likely to be lower in the middle of Nevada due to its lower population density and potentially less severe impact of pollution compared to Los Angeles. Therefore, the marginal benefit curve would shift to the left, leading to less abatement in Nevada.

-Refer to the Above Figure