Question

Suppose that initially, society experiences a degree of air cleanliness that is higher than $Q_o$. What would be true of the marginal cost in relation to the marginal benefit, and why would this fact induce society to reduce the degree of air cleanliness toward$Q_o$?

Short answer

At amounts, more noteworthy than $Q_o$ the marginal benefit from contamination decrease is lower than the marginal cost of contamination reduction. Accordingly, it is helpful for firms to diminish the level of air neatness.

Step-by-step solution

Introduction

The socially ideal level is given where the marginal cost is equivalent to the marginal benefit of contamination reduction. Anytime lower than the social ideal, the marginal benefit from contamination reduction will be more noteworthy than the marginal cost of contamination decrease.

Explanation

Expanding the level of air neatness will be helpful till the fact its marginal cost is equivalent to the marginal benefit. At points, the more noteworthy than $Q_o$ marginal cost of contamination reduction (cleaning the air) is more prominent than the marginal benefit from clean air. Consequently, the general public will lessen the level of clean air to where the marginal benefit from clean air is equivalent to the marginal cost of clean air.