Final answer:
Tightening pollution controls produces the greatest marginal benefit when firms are emitting a significant amount of pollution and the cost of implementing the controls is relatively low.
Step-by-step explanation:
The greatest marginal benefit from tightening pollution controls occurs when the additional benefit of reducing pollution is greater than the additional cost incurred for implementing those controls.
For example, if a firm is emitting a high level of pollution and the pollution controls are relatively inexpensive to implement, the marginal benefit of reducing pollution would outweigh the cost. On the other hand, if a firm is already emitting a low level of pollution and the controls are very expensive, the marginal benefit may be lower compared to the cost.
Therefore, tightening pollution controls produces the greatest marginal benefit when firms are emitting a significant amount of pollution and the cost of implementing the controls is relatively low.