The optimum level of pollution emissions:
A) is zero.
B) occurs where the marginal external benefit is zero.
C) occurs where no damage to the environment is being done.
D) occurs where the marginal external benefit equals the marginal external cost.
E) occurs where the marginal external cost equals the marginal cost of abatement.

Question

Quizplus · Accepted Answer

The optimal level of pollution emissions occurs where the marginal external cost equals the marginal cost of abatement. This is because at this point, society is minimizing the costs of reducing pollution and the costs of the damages caused by pollution. Therefore, E is the best choice.

The Optimum Level of Pollution Emissions