What is the optimal degree of air pollution

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Reference no: EM13205790

Examine the following marginal costs and marginal benefits associated with air cleanliness in a given locale:

Quantity of Clean Air (%) Marginal Cost ($) Marginal Benefit ($)
0 50,000 600,000
20 150,000 360,000
40 200,000 200,000
60 300,000 150,000
80 400,000 120,000
100 Infinite 0

What is the optimal degree of air cleanliness?

What is the optimal degree of air pollution?

Suppose that a state provides subsidies for a company to build plants that contribute to air pollution. Cleaning up this pollution causes the marginal cost of air cleanliness to rise by $210,000 at each degree of air cleanliness. What is the optimal degree of air cleanliness after this change?

Reference no: EM13205790

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