Option A, determining point of diminishing returns
Explanation:
According to the law of diminishing returns, when in any business the profit increases marginally while the cost of input increases at a fast rate then a business is said as "not an effective business"
In case of regulations regarding pollution, it is very essential for the economist to determine whether the cost incurred in order to take measures to reduce pollution in any business is much higher than the profit gained, then such business are not profitable and hence specific measures should be taken to curb these issue through policy regulation.
