Answer:
. firms in the market produce the socially optimal level of pollution
Explanation:
Externality is when the activities of economic agents affect third parties not involved in production or consumption.
Negative externality is when the marginal social cost is greater than the marginal social benefit. In this case, firms in the market produce too much pollution and society's well-being can be improved if the quantity of pollution decreases.
Postive externality is when the marginal social benefit is greater than the marginal social cost. In this case, firms in the market produce too little pollution.
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Answer:
firms in the market produce the socially optimal level of pollution.
Explanation:
Optimal level of pollution is a pollution level in which social welfare is taken advantage of by relating marginal cost of additional pollution with the marginal benefits. This idea of optimal level identifies the likely advantage of allowing pollution which will not be gained if pollution had been gotten rid of.
