Refer to the Figure Above

question 11

Multiple Choice

Refer to the Figure above. If the firm above faced an emissions charge of $ t* per ton/month, at what level does the firm reach a socially efficient solution for emissions?

• A) 0
• B) e₁
• C) e^*
• D) e₀

---

Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to own property, enter contracts, and sue or be sued.

Taxable Income

Earnings subject to taxation, which equals gross income minus any allowable deductions and exemptions.

Non-Dividend Paying Corporation

A corporation that chooses not to distribute any part of its earnings to shareholders as dividends, typically to reinvest in the business.