Economic analysis of the optimal amount of pollution is typically done in terms of the amount of pollution abated, as opposed to the amount of pollution produced. Why?
◦ Because the abatement of pollution is a "good" to which we can more easily apply the concepts of supply and demand.
◦ Because there are no marginal benefits of pollution produced, so it is necessary to study pollution abated in order to equate marginal benefits and marginal costs.
◦ Because governments and environmental authorities can produce more reliable data on pollution abated than pollution produced, which facilitates the economic analysis.
◦ Because it is more practical to measure the marginal costs of pollution abated than of pollution produced.
◦ All of the above are correct.
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