Figure 18.2.3
-Refer to Figure 18.2.3 above. Which of the following statements is correct?
A) In this case, a fee is better, because the MEC curve is flat and the MCA curve is steep.
B) In this case, a fee is better, because the MEC curve is steep and the MCA curve is flat.
C) In this case, either a fee or a standard work the same because the MEC curve is steep and the MCA curve is flat.
D) In this case, neither a fee nor a standard work, because the MEC curve is steep and the MCA curve is flat.

Question

Figure 18.2.3
-Refer to Figure 18.2.3 above. Which of the following statements is correct?
A) In this case, a fee is better, because the MEC curve is flat and the MCA curve is steep. 
B) In this case, a fee is better, because the MEC curve is steep and the MCA curve is flat. 
C) In this case, either a fee or a standard work the same because the MEC curve is steep and the MCA curve is flat. 
D) In this case, neither a fee nor a standard work, because the MEC curve is steep and the MCA curve is flat.

Quizplus · Accepted Answer

A fee is better when the MEC (Marginal External Cost) curve is steep and the MCA (Marginal Cost of Abatement) curve is flat, as it allows for more efficient cost distribution among firms.

Figure 18.2.3 -Refer to Figure 18.2.3 Above. Which of the Following Statements