Which of the following statements is INCORRECT?
A) The MSC includes the market-level marginal abatement cost and the government's cost of enforcement
B) If the MSC function is known, total social costs at a given abatement level are found as an area under the MSC
C) If the TSC function is known, the marginal social cost of a given abatement level is equal to an area under the TSC
D) The MSC of environmental quality is captured by the supply of environmental quality

Question

Quizplus · Accepted Answer

The marginal social cost (MSC) is the additional cost associated with a one-unit increase in the level of an activity, such as pollution abatement, and is represented by the slope of the total social cost (TSC) function at a given point, not by an area under the TSC curve.

Which of the Following Statements Is INCORRECT