Final Answer:
From society's perspective, if MB2 and MC1 are relevant, Q1 represents too little pollution abatement.
Step-by-step explanation:
In environmental economics, the Marginal Benefit (MB) and Marginal Cost (MC) curves are crucial in determining the optimal level of pollution abatement. When MB is greater than MC, it signifies a societal benefit from additional pollution abatement. In the given scenario, if MB2 (the marginal benefit curve) intersects with MC1 (the marginal cost curve) at Q1, it indicates that society would benefit from increasing pollution abatement beyond Q1.
This implies that at Q1, the additional benefit gained from reducing pollution further (MB2) is greater than the additional cost incurred (MC1), suggesting that too little pollution abatement is currently in place.
Option B is the answer.
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Complete Question
Refer to the diagram (given below). From society's perspective, if MB2 and MC1 are relevant,
Q4 represents too little pollution abatement.
Q1 represents too little pollution abatement.
Q3 represents an optimal amount of pollution abatement.
Q2 represents too little pollution abatement.
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