Including the costs of enforcement decreases the socially efficient level of emissions.
Combining the marginal costs of enforcement with the MAC results in the socially efficient level of emissions increasing.

Question

Quizplus · Accepted Answer

Including the costs of enforcement increases the total cost of reducing emissions, and thus the socially efficient level of emissions decreases. Combining the marginal costs of enforcement with the MAC will also result in a higher total cost, causing the socially efficient level of emissions to decrease further.

Including the Costs of Enforcement Decreases the Socially Efficient Level