Assume that scientific studies provide you with the following information concerning the benefits and costs of sulfur dioxide emissions:

Benefits of abating (reducing) emissions: = 500 20Costs of abating emissions: = 200 + 5

where A is the quantity abated in millions of tons and the benefits and costs are given in /ton.

1. What is the socially efficient level of emissions abatement? What are the marginal benefit and marginal cost of abatement at the socially efficient level of abatement?
2. Suppose that the current level of emissions abatement is one million fewer than the socially efficient level. What emission fee in /ton should the government set in order to reach the social optimum?

1. Current = 200 + 5 11 = 255. If the government sets the fee at, say, 240, the firm will not reduce its pollution since the marginal cost of abatement is higher than the fee.
2. By the same logic, if the government sets the fee at 280 the firm will reduce its emissions by too much. So the government should set it at exactly 260 per ton.

Question the above in BOLD marked , is it not for the beneficial for the government to charge as much as as possible to reduce pollution etc?