Marginal social cost of pollution rises as more pollution

Assignment Help Business Economics

Reference no: EM131196027

The marginal social cost of pollution rises as more pollution is emitted. The marginal social benefit of pollution falls as more pollution is emitted.

Part 1: Use the infinite line tool to draw a curve showing the marginal social cost of pollution (MSC). Tip: Draw the curve so that it begins at the origin.

Part 2: Use the infinite line tool to draw a curve showing the marginal social benefit of pollution (MSB). Tip: Draw the curve so that it intersects both the vertical axis and horizontal axis. Part 3: Plot a point on the horizontal axis to identify the level of pollution emitted in an unregulated market economy. Label this point Qmkt. Tip: Assume that it is costless for an individual to pollute.

Part 4: Use the vertical drop line tool to identify the socially optimal level of pollution. Label this point Qopt. Make sure that the highest point of the drop line for Qopt is placed on the MSB curve.

Reference no: EM131196027

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