In Pursuit of the Efficient Quantity of PollutionThe market determined quantity of pollution, QMKT, is too high because polluters don’t pay the marginal social cost, and thus pollute beyond the socially optimal quantity, QOPT, at which marginal social cost equals marginal social benefit. A Pigouvian tax of $200—the value of the marginal social cost of pollution when it equals the marginal social benefit of pollution—gives polluters the incentive to emit only the socially optimal quantity of pollution. Another solution is to provide permits for only the socially optimal quantity of pollution.