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)PE
B)the value of the area QBBEQE
C)PE × 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)PE 
B)the value of the area QBBEQE 
C)PE × 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 represented by the vertical distance between the MC curve and the horizontal axis, which is the value of the area QBBEQE. This represents the additional cost of reducing pollution from QB to QE units. PE and PE × QE represent the total cost of reducing pollution to the level of QE, but do not specifically represent the additional cost of reducing pollution from QB to QE units. The value of the area BEF represents the total cost of reducing pollution to the level of QB, but does not specifically represent the cost of increasing pollution reduction from QB to QE units.

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