Question

As the extent of environmental protection expands, would you expect marginal costs of environmental protection to rise or fall? Why or why not?

Short answer

If resources are not adequately allocated, marginal costs will grow.

Step-by-step solution

Introduction

Environmental protection is the process of safeguarding and conserving the natural environment. Additional costs incurred with the cost of producing an additional unit are referred to as marginal costs. Additional benefit resulting from the sale of one extra unit of product (marginal benefit).

Explanation

Every country attempts to limit emissions from time to time by enacting environmental regulations. These regulations require businesses to contribute to the reduction of emissions in exchange for tax breaks and other government advantages. However, if resources are not efficiently managed and profits are not generated, marginal costs will outweigh marginal benefits.