A Chemical-Producing Firm Is Located Just Upstream from an Electric

question 135

Multiple Choice

A chemical-producing firm is located just upstream from an electric power plant.Instead of the more expensive procedure of burying its wastes,the chemical-producing firm begins dumping its waste into the stream.This causes increased variable costs for the power plant,which uses water from the stream to cool its turbines.The chemical producer's dumping of waste into the stream causes

• A)The MC of the chemical firm to shift downward and the MC of the power company to shift upward.
• B)The MC of the chemical firm to shift upward and the MC of the power company to shift downward.
• C)Only the MC of the chemical firm to shift upward.
• D)Only the MC of the power firm to shift downward.

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Definitions:

Restricted Retained

Earnings that are not freely available for distribution to owners, often earmarked for compliance, legal, or operational purposes.