Recall the application about the marginal cost and marginal benefit of reducing methane emissions.What does the optimal level of methane abatement depend on?
A)the level at which the polluting firms are able to maximize their profits
B)the total cost of abatement
C)the marginal benefit of abatement
D)It is not possible to determine an optimal level of methane.

Question

Quizplus · Accepted Answer

The optimal level of methane abatement depends on the marginal benefit of abatement, which is the additional benefit of reducing an additional unit of methane emission. This is because the cost of abatement increases as more emissions are reduced, while the benefits decrease. The optimal level of abatement occurs where the marginal cost of abatement equals the marginal benefit of abatement, indicating that the cost of reducing one more unit of emissions is equal to the benefit gained from reducing that unit. Therefore, choice C is the best answer.

Recall the Application About the Marginal Cost and Marginal Benefit