The optimal level of air quality
A)is 100 percent, which creates a pollution-free environment
B)is smaller the lower the marginal social cost of air quality
C)is greater the lower the marginal social benefit of air quality
D)is greater the lower the marginal social cost of air quality
E)is smaller the greater the marginal social benefit of air quality

Question

Quizplus · Accepted Answer

The optimal level of air quality is determined by comparing the marginal social cost and marginal social benefit. The optimal level occurs where the marginal social benefit equals the marginal social cost. Since marginal social cost decreases as air quality increases, and marginal social benefit decreases as air quality increases, the optimal level of air quality is greater the lower the marginal social cost of air quality. Therefore, the best choice is D.

The Optimal Level of Air Quality