D. both taxes and transierS AVC. inequality. None of the above E. mption that n

Question

D. both taxes and transierS AVC. inequality. None of the above E. mption that n those who wn as MC1 / MC2 CO MB2 for a good we can -MB, Q Q1 2 Quantity of Pollution Removal e private Q3 ill equal Refer to the preceding diagram for Question 56 100. Which of the following might shift the marginal ,which benefit curve from MB1 to MB2? (A) A new government tax on pollution (B) Major new studies strongly linking cancer to pollution (C) Improved technology for reducing pollution (D) A change in consumer tastes for manufacturing goods (E) A decrease in the price of recycled goods cost+

Explanation / Answer

Option (E).

Shift from MB1 to MB2 means an increase in marginal benefit. When price of recycled goods decrease, people demand more recycled goods which increases the marginal benefits.

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