Reference: Ref 16-8 Figure 16.7 Reference: Ref 16-8 (Figure 16.7) Which of the f

Question

Reference: Ref 16-8

Figure 16.7

Reference: Ref 16-8

(Figure 16.7) Which of the following statements is TRUE? The efficient quantity of pollution occurs at 6,000 units of pollution or less. At 2,000 units of pollution, the marginal benefit of pollution exceeds the marginal cost of pollution, so there should be a greater quantity of pollution. At 2,000 units of pollution, the marginal benefit of pollution is less than the marginal cost of pollution, so there should be a lower quantity of pollution. At 2,000 units of pollution, the marginal benefit of pollution exceeds the marginal cost of pollution, so there should be a lower quantity of pollution.

Explanation / Answer

The efficient quantity of pollution occurs at 6,000 units of pollution or less. At 2,000 units of pollution, the marginal benefit of pollution exceeds the marginal cost of pollution, so there should be a greater quantity of pollution.

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