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

As the extent of environmental protection expands marginal costs of environmental protection will rise.

Step-by-step solution

Step 1. Definition of Environmental Protection

Environmental protection refers to the activities that are maintained or restored the quality of environment.

Step 2. Basic understanding

We all know in the real world phenomena reducing pollution is costly whether pollution is being reduced with the help of technologies or by paying charges like pollution charge. We can tell with just basic knowledge that environmental protection would cost more.

Step 3. Graph for explaining the reason for rising marginal cost with an extent of environmental protection

Step 4. Explaining the graph

When the quantity of environmental protection is low so that pollution is extensive - for example, at quantity Q1 - there are usually numerous relatively cheap and easy ways to reduce pollution, and the marginal benefits of doing so are quite high. At Q1, it makes sense to allocate more resources to fight pollution. However, as the extent of environmental protection increases, the cheap and easy ways of reducing pollution begin to decrease, and one must use more costly methods. The marginal cost curve rises. Also, as environmental protection increases, one achieves the largest marginal benefits first, followed by reduced marginal benefits. As the quantity of environmental protection increases to, say, Q2, the gap between marginal benefits and marginal costs narrows. At point Q3 the marginal costs will exceed the marginal benefits. At this level of environmental protection, society is not allocating resources efficiently, because it is forfeiting too many resources to reduce pollution.