Which part or parts of the paragraph indicate the execution of a cost-benefit analysis?

The factories had to stay within the pollution control cap in order to avoid the fine. The government later determined that social costs decreased along with the reduction in pollution. However, the cost of reducing the pollution was high in this context. The good thing is that the pollution itself is subject to change owing to various upgrades.

Answer

The government later determined that social cost decreased along with the reduction in pollution.

Explanation

Cost-Benefit Analysis is a process which a business uses to analyze decisions. The analyst sums the benefits of a situation and then subtracts the cost associated with making that decision. In this case the government can perform a CBA to check whether the decision to allow the factories to continue producing as long as it stays within the pollution control cap had minimum social cost.

The correct answer is not only "The government later determined that social costs decreased along with the reduction in pollution" but it is also " However, the cost of reducing the pollution was high in this context."