Question

To enforce the optimum level of​ emissions, a government could set an emissions standard at the...

To enforce the optimum level of​ emissions, a government could set an emissions standard at the quantity

A.

located at the horizontal intercept of the MCA curve.

B.

located at the vertical intercept of the MSB curve.

C.

located at the horizontal intercept of the MSB curve.

D.

located at the vertical intercept of the MCA curve.

E.

where the MSB curve crosses the MCA curve.

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Answer #1

Answer

Option E

E.

where the MSB curve crosses the MCA curve

The government should set the emission standard quantity at the MCA=MSB where the benefits and costs of the emission is equal for the society.

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