Explain how the optimal quantity of air pollution is determined

Question

What will be an ideal response?

Answer 1

As the air becomes cleaner, the marginal benefit of air cleanliness diminishes, reflecting the fact that the more clean air we breathe, the less we value an additional unit of cleanliness. The marginal cost of air cleanliness increases as air becomes cleaner, however, reflecting the fact that attaining each additional unit of air cleanliness requires incurring higher additional costs. The optimal amount of air cleanliness (or the optimal amount of pollution) arises at the point at which the marginal benefit of clean air equals the marginal cost.