Question

4. Problems and Applications Q4 Many observers believe that the levels of pollution in our society are too high. True or False: If society wishes to reduce overall pollution by a certain amount, it is efficient to have firms with lower costs reduce greater amounts of pollution than those with higher costs.

Answer 1

Answer: True

Explanation:

Firms with lower costs would also incur a lower cost when they try to reduce pollution so they should reduce more pollution because of this reduced cost that they will incur.

Firms with higher costs would then reduce less pollution because this would ensure that they do not spend too much on pollution reduction and incur even more costs.