Ceteris paribus, what do you expect to happen to the equilibrium quantity of pollution prevented if the marginal benefit of pollution prevention decreases?

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22-07-2022
Social Studies

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Ceteris paribus, what do you expect to happen to the equilibrium quantity of pollution prevented if the marginal benefit of pollution prevention decreases?

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sakshigupta4990 sakshigupta4990 · Answer 1 · 2022-07-31T11:37:19+02:00

Equilibrium quantity to decrease pollution prevented if the marginal benefit of pollution prevention.

Based on the information provided within the question it can be said that in this situation you can expect the equilibrium quantity to decrease, meaning that the Marginal Benefit will shift to the left. This happens when demand stays the same and the supply decreases causing the equilibrium quantity to decrease and the equilibrium price to increase.

A lower marginal benefit signifies that to the producer/consumer the prevention of pollution is more appealing, and in fact can improve its marginal utility. In such a scenario, the incentive is to decrease the quantity of pollution as more prevention would be done.

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