If the marginal cost of pollution abatement differs between two firms,the total cost of pollution abatement can be lowered by:
A)increasing abatement where its marginal cost is high and reducing it where marginal cost is lower.
B)decreasing abatement where its average cost is high and reducing it where average cost is lower.
C)increasing abatement where its marginal cost is less and reducing it where marginal cost is greater.
D)decreasing abatement where its marginal cost is less and increasing it where marginal cost is greater.

Question

Quizplus · Accepted Answer

The best choice is to increase abatement where its marginal cost is less and reduce it where marginal cost is greater. This strategy will lead to the most efficient allocation of abatement efforts because it will minimize the total cost of pollution abatement for both firms. By increasing abatement where its marginal cost is less, the firm will be able to achieve a greater reduction in pollution at a lower cost. Conversely, by reducing abatement where marginal cost is greater, the firm will be able to lower its total abatement costs without sacrificing too much in terms of pollution reduction. Overall, this approach will help to balance the need for environmental protection with the need for economic efficiency.

If the Marginal Cost of Pollution Abatement Differs Between Two