Question

Quantity of Pollution Abatement
Marginal Cost
Marginal Benefits
1,000
150,000
550,000
1,500
200,000
400,000
2,000
300,000
300,000
2,500
450,000
150,000
Referring to the table, if the marginal benefit increased by $300,000 at each level, the new optimal quantity would be:
a) 2,500
b) 2,000
c) 1,500
d) 1,000

Answer 1

The marginal external cost curve suggests that marginal profits are decreasing as it climbs. Consequently, when the optimal price rises, the ideal quantity declines.

Productivity declines when one production element rises while the others stay the same. A declining marginal return is what this is. The marginal external cost of pollutants increases with the amount of plastics in this scenario, leading to optimal price increase and optimal quantity decrease, which causes a decline in productivity levels. This is defined as the additional benefit to society as a whole from each additional unit of pollution. The benefit chosen is the Marginal Social Benefit of Pollution, if all the costs and/or benefits associated with pollution were fully listed. We refer to this situation as private benefits. Both the maker and the buyer of a specific good or service can benefit from it. From the total marginal utility, it is derived. A marginal social benefit is defined as the following added to: External benefits + a small private benefit.

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