Figure 16.1A firm that generates pollution is illustrated in Figure 16.1. The government has chosen to impose a pollution tax equal to P2. From the firm's point of view, the marginal benefit of abatement is:
A. avoiding the pollution tax imposed by the government.
B. the positive publicity the firm will receive by having a "green" production plant.
C. the reciprocal of the marginal cost of abatement.
D. zero because abatement benefits the general public, not the firm.
Answer: A
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