The socially optimal quantity of pollution is:
A)zero.
B)the quantity at which marginal social cost is equal to zero.
C)the quantity at which marginal social benefit is equal to zero.
D)the quantity at which marginal social cost is equal to the marginal social benefit.

Question

Quizplus · Accepted Answer

The socially optimal quantity of pollution is the point at which the marginal social cost (MSC) of pollution is equal to the marginal social benefit (MSB) of pollution. At this point, the overall welfare of society is maximized. Therefore, the answer is D, which is the quantity at which marginal social cost is equal to the marginal social benefit. Choices A and B are incorrect because zero pollution is often not a realistic or feasible option, and MSC is rarely zero. Choice C is incorrect because having marginal social benefit equal to zero would mean that the benefits of pollution are completely negligible, which is not the case in reality.

The Socially Optimal Quantity of Pollution Is