In which of the following situations should a firm increase its efforts to abate pollution?
A) The marginal benefit of abatement is less than its marginal cost.
B) The marginal benefit of abatement is greater than its marginal cost.
C) The marginal benefit of abatement is equal to its marginal cost.
D) none of the above

Question

Quizplus · Accepted Answer

When the marginal benefit of abatement is greater than its marginal cost, it means that the firm will receive a net benefit from increasing efforts to abate pollution. This is the most economically efficient choice, as it maximizes the overall benefit to society. If the marginal benefit is less than the marginal cost, it would not be economically efficient to increase abatement efforts, as the costs would outweigh the benefits. If the marginal benefit is equal to the marginal cost, the firm should continue with current abatement efforts, but not necessarily increase them.

In Which of the Following Situations Should a Firm Increase