The marginal benefit of reducing pollution and the marginal cost of reducing pollution are given by the following equations: MB = - 2U2 + 18, and MC = 2U2 + 2, where U is the number of units of pollution abatement. What is the net marginal benefit (MB - MC) of abating the first unit of pollution (U = 1)?

Question

Quizplus · Accepted Answer

MB - MC = (- 2U2 + 18) - (2U2 + 2) = - 4U2 + 16. When U = 1, MB - MC = - 4(1)2 + 16 = 12.

The Marginal Benefit of Reducing Pollution and the Marginal Cost