Two firms, A and B, are legally required to reduce their toxic emissions. If Firm A's marginal cost of abatement is $5 and Firm B's marginal cost of abatement is $3,
A) the socially optimal joint level of abatement is not being achieved.
B) Firm B should abate more and Firm A should abate less in order to reduce total abatement costs.
C) Firm A should abate more and Firm B should abate less in order to reduce total abatement costs.
D) their joint total cost of abatement is at a minimum.
E) their joint total cost of abatement is at a maximum.
Correct Answer:
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