When using a damage function, incremental benefits are measured as a vertical distance of total damages (TD) associated with a decrease in some contaminant (C).

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This statement is true. The incremental benefits of a damage function are typically measured as the vertical distance between the original total damages and a new total damages associated with a decrease in the level of a contaminant. This reflects the reduction in damages that can be achieved by reducing the contaminant level, and is an important parameter used in economic analysis of environmental policies.

When Using a Damage Function, Incremental Benefits Are Measured as a Vertical