costly methods. The marginal cost curve rises. Also, as environmental protection increases, one achieves the

largest marginal benefits first, followed by reduced marginal benefits. As the quantity of environmental

protection increases to, say, Qb, the gap between marginal benefits and marginal costs narrows. At point Qc the

marginal costs will exceed the marginal benefits. At this level of environmental protection, society is not

allocating resources efficiently, because it is forfeiting too many resources to reduce pollution.

FIGURE 12.4 Marginal Costs and Marginal Benefits of Environmental Protection Reducing pollution is costly—one

must sacrifice resources. The marginal costs of reducing pollution are generally increasing, because one can first

make the least expensive and easiest reductions, leaving the more expensive methods for later. The marginal
benefits of reducing pollution are generally declining, because one can take the steps that provide the greatest
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