The socially efficient equilibrium emission standard sets the maximum rate of emissions equal to the ________.
A)socially efficient level of abatement
B)socially efficient level of emissions
C)level of emissions that maximizes total abatement cost
D)level of emissions that minimizes total abatement cost

Question

Quizplus · Accepted Answer

The socially efficient equilibrium is achieved when the marginal social cost of emissions is equal to the marginal social benefit of emissions. This means that the level of emissions that maximizes social welfare is the socially efficient level of emissions. Therefore, the socially efficient equilibrium emission standard sets the maximum rate of emissions equal to the socially efficient level of emissions.

The Socially Efficient Equilibrium Emission Standard Sets the Maximum Rate