Answers
21)
Without any regulation, firm will produce pollution such that MB=0
50-2x=0
x=25
Correct option is
b) 25
22)
Optimal level of pollution can be achieved if MB=MC i.e.
50-2x=20+3x
5x=30
x=6
Lorax will set a regulation that limits the pollution to 6 units
Correct option is
b) 6
.