Ceteris paribus, what do you expect to happen to the equilibrium quantity of pollution prevented if the marginal cost of pollution prevention decreases?

Question

Social Studies

Heidy

4 October, 11:26

Ceteris paribus, what do you expect to happen to the equilibrium quantity of pollution prevented if the marginal cost of pollution prevention decreases?

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Answers (2)

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Mohamed Dawson · Answer 1

The quantity should decrease.

Explanation:

A lower marginal cost signifies that to the producer/consumer the prevention of pollution is more appealling, and in fact can improve its marginal utility. In such scenario, the incentive is to decrease the quantity of pollution as more prevention would be done.

Butterfinger · Answer 2

equilibrium quantity to decrease,

Explanation:

Based on the information provided within the question it can be said that in this situation you can expect the equilibrium quantity to decrease, meaning that the Marginal Benefit will shift to the left. This happens when demand stays the same and the supply decreases causing the equilibrium quantity to decrease and the equilibrium price to increase.