The socially optimal level of pollution occurs where the marginal damage is equal to the marginal abatement costs.

Question

Quizplus · Accepted Answer

The socially optimal level of pollution is achieved when the marginal cost of reducing (abating) pollution (marginal abatement cost) is equal to the marginal damage caused by pollution. This balance ensures that the cost of reducing pollution further would exceed the benefits of the reduction, achieving an efficient allocation of resources.

The Socially Optimal Level of Pollution Occurs Where the Marginal