We have seen that the efficient level of pollution is the one that minimises the sum of total abatement costs plus total damage costs.

Refer now to Figure 6.5. Show that if pollution abatement takes place to the extent ! − MA the sum of total damage costs and total abatement costs is C1 + C2 + C3. Prove that ‘too little’

abatement (relative to the optimal quantity)

results in higher costs than C1 + C2.