In the multiple-polluter case, each firm faced with an emission charge imposed as a marginal tax (MT) abates as long as

Question

Quizplus · Accepted Answer

In a multiple-polluter scenario, each firm must consider the marginal cost of abating pollution compared to the marginal tax imposed by the government. The firm should only abate if the marginal cost of abatement (MAC) is less than the marginal tax (MT) imposed by the government. Thus, the correct choice is A - its MAC < MT.

In the Multiple-Polluter Case, Each Firm Faced with an Emission