Select from the best answer below. In the context of addressing a negative exter

Question

Select from the best answer below. In the context of addressing a negative externality such as emissions, an efficient policy is one in which 0 In which marginal abatement costs across all firms are equalized and exceed the realized marginal external costs. 0 In which marginal abatement costs across all firms are not equal but which exceed the realized marginal external costs for at least one firm. 0 In which marginal abatement costs across all firms are equalized and equal the realized marginal external costs. In which marginal abatement costs across all firms are not equal but which equal the realized marginal external costs for at least one firm.

Explanation / Answer

THe answer is C -) IN which marginal abatement cost across all firms are equalized and equal the realized marginal external cost.

because we know the that optimam level of production is where the marginal abatement cost is equal to marginal external cost .so the best policy is this. that marginal abetement cost is equal to marginal social cost.

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