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Marginal Cost and Benefit Discussion

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Explain why the optimal level of pollution is not zero. According to an EPA study, the health hazards of Superfund sites have been greatly exaggerated and air pollution tends to be a bigger health hazard than toxic waste dumps. Why is more attention focused on toxic waste dumps than on air pollution?

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It all ties back to Marginal Cost and Marginal Benefit.

The optimal level of pollution is not zero as at some level of pollution, the marginal cost to reduce the pollution would exceed the marginal benefit received from the reduction in pollution. Waterways and ...

Solution Summary

The solution explains the concepts of marginal cost and marginal benefit using the example in the question. It argues that the optimal level of pollution is not zero and provides solid rationale to support the argument.

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