If the marginal external cost of pollution increases with the annual output of polluting goods, then the total external cost will increase at a constant rate with annual output.

Question

Quizplus · Accepted Answer

If the marginal external cost of pollution increases with the annual output of polluting goods, the total external cost will not increase at a constant rate with annual output. Instead, it will increase at an increasing rate, since the marginal external cost is rising.

If the Marginal External Cost of Pollution Increases with the Annual