The marginal cost of emissions curve is a marginal benefit of abatement curve when read from right to left.

Question

Quizplus · Accepted Answer

This statement is true. The marginal cost of emissions curve shows the additional cost of emitting one more unit of pollution, while the marginal benefit of abatement curve shows the additional benefit of reducing one more unit of pollution. As you move from right to left on the marginal cost of emissions curve, it becomes the marginal benefit of abatement curve. This is because the cost of reducing pollution (abatement) equals the benefit of reducing pollution when pollution is high, and as we reduce pollution, the cost of reducing each additional unit of pollution increases, while the benefit decreases. Therefore, the two curves intersect at the optimal level of pollution reduction.

The Marginal Cost of Emissions Curve Is a Marginal Benefit