The optimal level of pollution is
A)zero
B)the level at which the marginal social cost of air quality equals the marginal social benefit
C)the level at which the average social cost of air quality equals the average social benefit
D)the level at which the total social cost of air quality equals the total social benefit
E)the level at which the marginal social cost of air quality is minimized

Question

Quizplus · Accepted Answer

The optimal level of pollution is the level at which the marginal social cost of air quality equals the marginal social benefit. This means that the costs of reducing pollution would be greater than the benefits gained from reducing it any further. Therefore, at this level, society is getting the maximum benefit from its resources. Choice A is too idealistic and not attainable in practice. Choices C and D do not take into account the marginal analysis which is crucial in determining the optimal level of pollution. Choice E only looks at minimizing cost, ignoring the benefits gained from pollution reduction.

The Optimal Level of Pollution Is