-Refer to the diagram above.An Environment Canada requirement for a $700 air pollution control device for all cars would__________ the socially optimal reduction in pollution because __________.
A) be equal to;any and all reductions in pollution are warranted
B) not be equal to;the marginal cost exceeds the marginal benefit
C) not be equal to;the reduction is less than 100%
D) not be equal to;the marginal benefit exceeds the marginal cost
E) be equal to;there is no other way to force the auto industry to reduce emissions

Question

-Refer to the diagram above.An Environment Canada requirement for a $700 air pollution control device for all cars would__________ the socially optimal reduction in pollution because __________.
A) be equal to;any and all reductions in pollution are warranted 
B) not be equal to;the marginal cost exceeds the marginal benefit 
C) not be equal to;the reduction is less than 100% 
D) not be equal to;the marginal benefit exceeds the marginal cost 
E) be equal to;there is no other way to force the auto industry to reduce emissions

Quizplus · Accepted Answer

The requirement would not be equal to the socially optimal reduction because the marginal cost of the device exceeds the marginal benefit of the pollution reduction it provides.

-Refer to the Diagram Above