If the marginal social benefit received from pollution is less than its marginal social cost:
A)society's well-being can be improved if the quantity of pollution increases.
B)society's well-being can be improved if the quantity of pollution decreases.
C)society has achieved its socially optimal level of pollution.
D)the market is producing too little pollution.

Question

Quizplus · Accepted Answer

If the marginal social benefit received from pollution is less than its marginal social cost, it means that the negative effects of pollution outweigh any benefits received from it. Therefore, society's well-being can be improved if the quantity of pollution decreases – which is option B. Option A and D are incorrect because they suggest increasing pollution, which would only worsen the problem. Option C is incorrect because if the social cost exceeds the social benefit, then we have not achieved the socially optimal level of pollution.

If the Marginal Social Benefit Received from Pollution Is Less