Use the following to answer question:
Figure: The Socially Optimal Quantity of Pollution
-(Figure: The Socially Optimal Quantity of Pollution)Use Figure: The Socially Optimal Quantity of Pollution.In the figure,firms are the only beneficiaries of pollution,and costs are borne solely by others in the society.Without government intervention:
A)firms will continue to pollute until the marginal benefit to them is zero.
B)firms will continue to pollute until the marginal benefit to them is $200.
C)the optimal quantity of pollution will occur.
D)The outcome cannot be determined without more information.

Question

Use the following to answer question:
Figure: The Socially Optimal Quantity of Pollution 
-(Figure: The Socially Optimal Quantity of Pollution)Use Figure: The Socially Optimal Quantity of Pollution.In the figure,firms are the only beneficiaries of pollution,and costs are borne solely by others in the society.Without government intervention:
A)firms will continue to pollute until the marginal benefit to them is zero. 
B)firms will continue to pollute until the marginal benefit to them is $200. 
C)the optimal quantity of pollution will occur. 
D)The outcome cannot be determined without more information.

Quizplus · Accepted Answer

Without government intervention, firms will continue to pollute until the marginal benefit to them is zero. This is because they only consider their own benefits and not the costs borne by others in society. The socially optimal quantity of pollution would not occur in this scenario.

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