What is the argument against using that amount

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Reference no: EM133630160

Question: Consider the following data on the social costs and benefits associated with a policy to reduce water pollution (% reduction) by regulatory means: % reduction Social Costs (in millions) Social Benefits (in millions) 0 (status quo) 0 0 10 10 80 20 22 150 30 40 200 40 70 240 50 105 280 60 150 320 70 210 350 80 280 375 90 350 385 100 420 390 A. What level reduction (%) is most optimal based on the welfare (allocative efficiency) criterion? B. Current budgetary constraints limit the amount available to spend on the water pollution reduction policy to $250 million. What is the argument against using that amount to "buy" the maximum amount of pollution reduction possible (around 70-80%) based on available cost estimates? C. If budgetary resources are available to fund maximum (100%) pollution reduction, why would such a policy still not be optimal according to the welfare (efficiency) criterion?

Reference no: EM133630160

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