Look at the figures below representing pollution reduction with plants A and B. The government accurately estimates marginal costs and benefits from pollution reduction and sets the tax and regulation accordingly. Chose the correct statement.

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Chapter1: Making Economics Decisions
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Look at the figures below representing pollution reduction with plants A and B. The government accurately estimates marginal costs and benefits from pollution reduction and sets the tax and regulation accordingly. Chose the correct statement.

0
0
A
50
50
нов Figuere a
150
100
Figure c
ALMCB
200
100 150 200
-MCA
MCA
MC TOTAL
-SMB
PHB
м Стоен
SMB
PMB
A
y figure b
на
loo 150
Figure d
MC₂
200
MCA
So 100 150 200
MCA
A,B
.м.столь
SMB
PMB
MCTOTAL
SMB
PMB
On Figure a, marked in purple, point A represents the level of pollution reduction with a tax
achieved by firm A, and point B represents the level of pollution reduction with regulation achieved
by firm A.
On Figure b, marked in purple, point A represents the level of pollution reduction with a tax
achieved by firm A, and point B represents the level of pollution reduction with tax achieved by firm
B.
On Figure c, marked in purple, point A represents the level of pollution reduction with a tax
achieved by firm A, and point B represents the level of pollution reduction with regulation achieved
by firm B.
On Figure d, marked in purple, point A and B represent the level of pollution reduction achieved
with a tax or a regulation by each individual firm.
Transcribed Image Text:0 0 A 50 50 нов Figuere a 150 100 Figure c ALMCB 200 100 150 200 -MCA MCA MC TOTAL -SMB PHB м Стоен SMB PMB A y figure b на loo 150 Figure d MC₂ 200 MCA So 100 150 200 MCA A,B .м.столь SMB PMB MCTOTAL SMB PMB On Figure a, marked in purple, point A represents the level of pollution reduction with a tax achieved by firm A, and point B represents the level of pollution reduction with regulation achieved by firm A. On Figure b, marked in purple, point A represents the level of pollution reduction with a tax achieved by firm A, and point B represents the level of pollution reduction with tax achieved by firm B. On Figure c, marked in purple, point A represents the level of pollution reduction with a tax achieved by firm A, and point B represents the level of pollution reduction with regulation achieved by firm B. On Figure d, marked in purple, point A and B represent the level of pollution reduction achieved with a tax or a regulation by each individual firm.
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