| Figure 74.1 | The Socially Optimal Quantity of Pollution |
The Socially Optimal Quantity of PollutionPollution yields both costs and benefits. Here the curve MSC shows how the marginal cost to society as a whole from emitting one more ton of pollution emissions depends on the quantity of emissions. The curve MSB shows how the marginal benefit to society as a whole of emitting an additional ton of pollution emissions depends on the quantity of pollution emissions. The socially optimal quantity of pollution is QOPT; at that quantity, the marginal social benefit of pollution is equal to the marginal social cost, in this case $200.
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