-The social cost of pollution equals 4P,where P is the level of pollution,and the cost of pollution control equals 10 - 1P.What is the optimal level of pollution?
A) 0
B) 1
C) 2
D) 4
E) 10

Question

-The social cost of pollution equals 4P,where P is the level of pollution,and the cost of pollution control equals 10 - 1P.What is the optimal level of pollution?
A) 0 
B) 1 
C) 2 
D) 4 
E) 10

Quizplus · Accepted Answer

The optimal level of pollution is where the marginal social cost of pollution equals the marginal cost of pollution control. The marginal social cost of pollution is 4, and the marginal cost of pollution control is -1. So, the optimal level of pollution is where 4 = -1, which is P = 0.

-The Social Cost of Pollution Equals 4P,where P Is the Level