Suppose That an Industry Emits a Chemical That Pollutes the Ground

question 24

Multiple Choice

Suppose that an industry emits a chemical that pollutes the ground water. Without considering the effects of the pollution, the industry has a marginal private cost curve of MPC $= Q + 30$ . The market demand curve is $P = 60 - Q$ , while the marginal social cost curve is $\mathrm { MSC } = 2 \mathrm { Q } + 30$ . What is the socially optimal emissions standard?

• A) 15 .
• B) 10 .
• C) 5 .
• D) 0 .

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