If MSC = 20 + 0.75A, where MSC is in millions of dollars, and A is the percentage of mercury emissions abatement, then
A) the total social costs of abatement equal $184 million when A is 8 percent
B) the TSC at an abatement level of 10 percent is $27.5 million
C) a 40 percent abatement level is associated with MSC of $30 million and TSC of 20 million
D) TSC cannot be determined at any abatement level

Question

Quizplus · Accepted Answer

To find the total social costs (TSC) at an abatement level of 8 percent, substitute A = 8 into the given formula: MSC = 20 + 0.75(8) = 20 + 6 = 26 million dollars. However, the question seems to have a misunderstanding in the interpretation of MSC as TSC. The formula given calculates the Marginal Social Cost (MSC), not the Total Social Cost (TSC). Therefore, the correct calculation of MSC does not directly provide TSC, but the statement about the calculation at 8 percent abatement is also not correctly interpreted in the options provided.