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There Are Two Plants in an Industry

Question 189

Multiple Choice

There are two plants in an industry.To reduce pollution,the government has imposed environmental standards forcing each plant to cut emissions by 60%.At the emissions standard,the marginal social benefit of pollution for plant A is $500,and the marginal social benefit of pollution for plant B is $125.The same level of pollution can be achieved at a lower cost by:


A) forcing plant A to reduce emissions and allowing plant B to increase emissions.
B) allowing plant A to pollute more and requiring plant B to pollute less.
C) forcing both plants to reduce emissions.
D) allowing both plants to pollute more.

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