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The Diagram Below Shows the Marginal Costs of Pollution Abatement

question 44

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The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.
The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2.    FIGURE 17-5 -Refer to Figure 17-5.Suppose Firm 1 and Firm 2 are each abating Q 3 units of pollution.If the government imposed an emissions tax of $40 per unit of emissions,and this tax rate was known to equal the social marginal cost of pollution,then we can predict with confidence that A) each firm would abate to Q3. B) each firm would abate to the same level. C) the resulting level of pollution would be socially optimal. D) Firm 2 would increase abatement beyond Q3 and Firm 1 would abate less than Q3. E) Firm 2 would increase its emissions and this would not be socially optimal. FIGURE 17-5
-Refer to Figure 17-5.Suppose Firm 1 and Firm 2 are each abating Q 3 units of pollution.If the government imposed an emissions tax of $40 per unit of emissions,and this tax rate was known to equal the social marginal cost of pollution,then we can predict with confidence that


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