The marginal social benefit received from pollution is equal to its marginal social cost in the market for highly polished glass. In this situation: 1. firms in the market produce the socially optimal level of pollution. 2. firms in the market produce too little pollution. 3. society's well-being can be improved if the quantity of pollution decreases. 4. firms in the market produce too much pollution.

. firms in the market produce the socially optimal level of pollution

Explanation:

Externality is when the activities of economic agents affect third parties not involved in production or consumption.

Negative externality is when the marginal social cost is greater than the marginal social benefit. In this case, firms in the market produce too much pollution and society's well-being can be improved if the quantity of pollution decreases.

Postive externality is when the marginal social benefit is greater than the marginal social cost. In this case, firms in the market produce too little pollution. 

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