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The Diagram Below Shows the Marginal Cost of Pollution Abatement

Question 38

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The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y. The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y.   FIGURE 17-6 -Refer to Figure 17-6.Firms X and Y have an emissions tax of $t imposed on each unit of pollution they produce.If Firm X chooses to abate Q<sub>X</sub> units of pollution,the total cost of its abatement is A) tax amount t multiplied by the maximum possible level of pollution abatement. B) area beneath the marginal cost of pollution abatement curve. C) area below the horizontal line at t and above the MC of pollution abatement curve. D) tax amount t multiplied by the level of pollution abatement,Q<sub>X</sub>. E) area beneath the marginal cost of pollution abatement curve up to Q<sub>X</sub>. FIGURE 17-6
-Refer to Figure 17-6.Firms X and Y have an emissions tax of $t imposed on each unit of pollution they produce.If Firm X chooses to abate QX units of pollution,the total cost of its abatement is


A) tax amount t multiplied by the maximum possible level of pollution abatement.
B) area beneath the marginal cost of pollution abatement curve.
C) area below the horizontal line at t and above the MC of pollution abatement curve.
D) tax amount t multiplied by the level of pollution abatement,QX.
E) area beneath the marginal cost of pollution abatement curve up to QX.

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