The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
FIGURE 17- 5
-Refer to Figure 17- 5.Suppose the government requires that each firm abate pollution to the level Q3.The outcome would be efficient because

Question

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
  FIGURE 17- 5
-Refer to Figure 17- 5.Suppose the government requires that each firm abate pollution to the level Q3.The outcome would be efficient because

Quizplus · Accepted Answer

The outcome would be inefficient because requiring each firm to abate to the same level does not account for differences in marginal abatement costs between firms, leading to a higher overall cost of abatement.

The Diagram Below Shows the Marginal Costs of Pollution Abatement