In order to achieve socially efficient levels of recycling in firms, the goal would be to equate _____________ across industries and materials.
A) marginal recycling costs
B) marginal tax rates
C) marginal cost of virgin materials
D) marginal emissions

Question

Quizplus · Accepted Answer

When marginal recycling costs are equated across industries and materials, firms will be incentivized to recycle the materials that are most cost-effective to recycle, ultimately leading to socially efficient levels of recycling. This is because firms will not be over-recycling materials that are too expensive to recycle, nor under-recycling materials that are less costly to recycle. Equating marginal tax rates or marginal emissions would not directly incentivize firms to recycle, and equating the marginal cost of virgin materials may not take into account the environmental benefits of recycling.

In Order to Achieve Socially Efficient Levels of Recycling in Firms