Use the following to answer question(s): Efficiency and Pollution

-(Exhibit: Efficiency and Pollution) If there is too much pollution in this market, the result is most likely at a point such as:
A) A.
B) B.
C) C.
D) E.

Question

Use the following to answer question(s): Efficiency and Pollution
 
-(Exhibit: Efficiency and Pollution) If there is too much pollution in this market, the result is most likely at a point such as:
A) A. 
B) B. 
C) C. 
D) E.

Quizplus · Accepted Answer

The correct answer is A because at point A, the marginal cost of pollution abatement is equal to the marginal benefit of pollution abatement. This means that the market is in equilibrium and there is no incentive for firms to either increase or decrease their pollution abatement efforts.

Use the Following to Answer Question(s): Efficiency and Pollution