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Figure: Pollution and Efficiency
-(Figure: Pollution and Efficiency)Use Figure: Pollution and Efficiency.In this market,whose sulphur emissions are a result of production,an efficient solution is one in which:
A) MSB

Question

Use the following to answer questions :
Figure: Pollution and Efficiency 
-(Figure: Pollution and Efficiency)Use Figure: Pollution and Efficiency.In this market,whose sulphur emissions are a result of production,an efficient solution is one in which:
A) MSB < MSC. 
B) MSC < MSB. 
C) total cost = total benefit. 
D) MSC = MSB.

Quizplus · Accepted Answer

An efficient solution is achieved when the Marginal Social Cost (MSC) is equal to the Marginal Social Benefit (MSB). This is because at this point, the society achieves the optimal level of pollution that maximizes the net social benefit. Therefore, the correct answer is (D) MSC=MSB.

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