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Figure: MSB and MSC of Pollution
-(Figure: MSB and MSC of Pollution) Look at the figure MSB and MSC of Pollution. If the current level of pollution is at Q₁, _____ pollution is being emitted, as _____.

Question

Use the following to answer questions: Figure: MSB and MSC of Pollution -(Figure: MSB and MSC of Pollution) Look at the figure MSB and MSC of Pollution. If the current level of pollution is at Q₁, _____ pollution is being emitted, as _____. A) not enough; MSB > MSC B) not enough; MSB < MSC C) too much; MSB > MSC D) the socially optimal amount of; MSB = MSC

Quizplus · Accepted Answer

At Q1, the marginal social benefit (MSB) of pollution is greater than the marginal social cost (MSC), indicating that not enough pollution is being emitted to reach the socially optimal level where MSB equals MSC.

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