There are two plants (A and B) in an industry.To reduce pollution, the government has imposed environmental standards forcing each plant to cut emissions by 60%.At the emissions standard, the marginal social benefit of pollution for plant A is $500, and the marginal social benefit of pollution for plant B is $125.The same level of pollution can be achieved at a lower cost by:

Question

Quizplus · Accepted Answer

Allowing plant A to pollute more and plant B to pollute less would achieve the same level of pollution at a lower cost because plant A has a higher marginal social benefit of pollution, indicating it is more costly for plant A to reduce emissions compared to plant B.

There Are Two Plants (A and B) in an Industry