Consider the following costs and benefits associated with cleaning up a polluted city lake.

a. Explain why the marginal cost of pollution reduction increases as the cleanliness of the water increases. Plot the MC curve in a diagram.
b. Explain why the marginal benefit of pollution reduction falls as the cleanliness of the water increases. Plot the MBcurve in the same diagram.
c. What is the optimal level of water cleanliness?
d. Explain why the efficient level of pollution is greater than zero.