Suppose that, at the current level of pollution, the marginal abatement cost is $30,000 and the marginal cost of pollution is $80,000. This economy is producing:
A) an efficient level of pollution if the total cost of pollution is $50,000.
B) too little pollution and should increase its pollution level.
C) too much pollution and should reduce its pollution level.
D) an efficient level of pollution if the marginal cost of pollution is $110,000.

Question

Quizplus · Accepted Answer

The economy is producing too much pollution because the marginal cost of pollution ($80,000) is higher than the marginal abatement cost ($30,000). Reducing pollution would lower overall costs.

Suppose That, at the Current Level of Pollution, the Marginal