Final answer:
The socially efficient level of pollution abatement is achieved when marginal WTP to reduce pollution equals the marginal social cost (MSC) of abatement, representing the point where societal benefits match the costs of reducing an additional unit of pollution.
Step-by-step explanation:
The socially efficient level of pollution abatement occurs when the marginal willingness to pay (WTP) to reduce pollution is equal to the marginal social cost (MSC) to increase abatement. In economic theory, this is recognized as the optimal level of pollution. Such a situation represents a point of equilibrium where the costs to society of reducing an additional unit of pollution is exactly balanced by the benefits derived from that reduction. For instance, if the optimal level of pollution is at four million gallons, this implies that the marginal cost and marginal benefits of reducing pollution are equal at that level of abatement.
In practice, reaching this socially efficient level often involves policy interventions like taxation or regulation to ensure that the market equilibrium reflects the true social costs of pollution. The goal is to prevent scenarios where pollution is reduced to a point where the exorbitant costs of abatement exceed the societal benefits (Qc in the theoretical model) and to avoid under-protection where too few resources are allocated towards fighting pollution (Qa).