Asked by Jesse Gonzalez on May 27, 2024
Verified
(Figure: Pollution and Efficiency) Use Figure: Pollution and Efficiency.In this market,whose sulfur emissions are a result of production,an efficient solution takes place at a price of _____ and a quantity of _____.
A) $5;40
B) $15;30
C) $25;30
D) $15;15
Sulfur Emissions
The release of sulfur compounds into the atmosphere, primarily from the burning of fossil fuels, which can cause environmental damage.
- Comprehend the Coase theorem and its conditions for achieving efficient outcomes in the presence of externalities.
- Grasp the dynamics between marginal social benefit, marginal social cost, and the preferred amount of pollution or externalities.
Verified Answer
AT
ANIKA TASNIMMay 27, 2024
Final Answer :
B
Explanation :
An efficient solution occurs where the marginal social cost (MSC) equals the marginal social benefit (MSB), which is at a price of $15 and a quantity of 30 units. At this point, the total pollution levels are minimized while still providing the optimal quantity of the product to society.
Learning Objectives
- Comprehend the Coase theorem and its conditions for achieving efficient outcomes in the presence of externalities.
- Grasp the dynamics between marginal social benefit, marginal social cost, and the preferred amount of pollution or externalities.
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