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Figure: Pollution and Efficiency
-(Figure: Pollution and Efficiency)Use Figure: Pollution and Efficiency.In this market,whose sulfur emissions are a result of production,an efficient solution is one in which:
A)MSB

Question

Use the following to answer question:
Figure: Pollution and Efficiency 
-(Figure: Pollution and Efficiency)Use Figure: Pollution and Efficiency.In this market,whose sulfur emissions are a result of production,an efficient solution is one in which:
A)MSB < MSC. 
B)MSC < MSB. 
C)total cost = total benefit. 
D)MSC = MSB.

Quizplus · Accepted Answer

An efficient solution is one where the marginal social cost (MSC) is equal to the marginal social benefit (MSB), which is shown in the figure where the two curves intersect. This means that the pollution is being reduced to the optimal level while still allowing for production and consumption to occur. Therefore, the best choice is D.

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