In economic analysis, the optimal level of pollution

Question

Quizplus · Accepted Answer

The optimal level of pollution is the point at which the marginal benefit of further reductions in pollution equals the marginal cost of those reductions. This is because reducing pollution beyond this point would result in costs greater than the benefits gained. Option A is incorrect as a zero level of pollution may not always be possible or feasible. Option C is incorrect as demand and private cost supply curves do not necessarily reflect the true social cost of pollution. Option D is also incorrect as government intervention may be necessary to correct market failures and achieve the optimal level of pollution.

In Economic Analysis, the Optimal Level of Pollution