Figure 5-7

-Refer to Figure 5-7.What is the incremental cost of increasing the quantity of pollution reduction from QB to QE units?
A)PF
B)the value of the area QBBEQE
C)PF × QE
D)the value of the area BEF

Question

Figure 5-7
 
-Refer to Figure 5-7.What is the incremental cost of increasing the quantity of pollution reduction from QB to QE units?
A)PF 
B)the value of the area QBBEQE 
C)PF × QE 
D)the value of the area BEF

Quizplus · Accepted Answer

The incremental cost of increasing the quantity of pollution reduction from QB to QE units is the value of the area QBBEQE. This is because the incremental cost is the difference in the total cost of pollution reduction at QE units and the total cost of pollution reduction at QB units. The total cost of pollution reduction at QE units is the area under the marginal cost curve from 0 to QE units, which is the area QBBEQE. The total cost of pollution reduction at QB units is the area under the marginal cost curve from 0 to QB units, which is the area QBBF. Therefore, the incremental cost of increasing the quantity of pollution reduction from QB to QE units is the area QBBEQE.

Figure 5-7 -Refer to Figure 5-7.What Is the Incremental Cost of Increasing