If we are considering further reductions in pollution, what rule should we follow to maximize the net benefit to society?

A. The marginal benefit from reducing another ton of pollution should equal zero.

B. The marginal benefit from reducing another ton of pollution should be greater than the marginal cost.

C. The marginal benefit from reducing another ton of pollution should be less than the marginal cost.

D. The marginal benefit from reducing another ton of pollution should be equal to the marginal cost.

Question

Business

Dario Hodge

2 November, 22:39

If we are considering further reductions in pollution, what rule should we follow to maximize the net benefit to society?

A. The marginal benefit from reducing another ton of pollution should equal zero.

B. The marginal benefit from reducing another ton of pollution should be greater than the marginal cost.

C. The marginal benefit from reducing another ton of pollution should be less than the marginal cost.

D. The marginal benefit from reducing another ton of pollution should be equal to the marginal cost.

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Answers (1)

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Prince Bailey · Answer 1

D. The marginal benefit from reducing another ton of pollution should be equal to the marginal cost.

Explanation:

The benefit arises when the cost is fully recovered, as in the given case the marginal cost for each ton reducing the pollution shall be equal to the benefit of marginal ton of pollution reduced.

Whenever, marginal cost is less than the benefit it is favorable but it is not permanent and thus, not valid, in case the cost is equal to the befit it is at break-even and is beneficial in every situation for the economy and environment.