Suppose a farm that is polluting an underground water supply faces the following marginal costs for abating units of pollution: 1st unit abated,MC = $250
2nd unit abated,MC = $400
3rd unit abated,MC = $650
4th unit abated,MC = $950
The marginal benefit to society from this farm abating units of pollution are as follows:
1st unit abated,MB = $1000
2nd unit abated,MB = $800
3rd unit abated,MB = $650
4th unit abated,MB = $300
If this farm abates 4 units of pollution,what is the net benefit to society of the final unit of pollution abated?
A) $0
B) -$650
C) $1150
D) $650
E) -$1150
Correct Answer:
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