Exhibit 17.7 -Refer to Exhibit 17.7,which Shows the Optimal Allocation of Pollution

question 16

Multiple Choice

Exhibit 17.7

-Refer to Exhibit 17.7,which shows the optimal allocation of pollution rights to firms polluting a river.If the government does not charge firms for polluting the river,the ______

• A)firms will emit Q₁ units of the pollutant at a price of P₀ each.
• B)firms will emit Q₂ units of the pollutant at a price of P₀ each.
• C)firms will emit Q₀ units of the pollutant at a price of P₃ each.
• D)firms will emit Q₁ units of the pollutant at a price of P₁ each.
• E)firms will emit Q₂ units of the pollutant at a price of P₂ each.

---

Definitions:

Stockholder's Equity

The ownership interest of shareholders in the assets of a corporation, represented by their shares of the company's stock.

Owners

Individuals or entities that hold legal possession and control over a business or asset, having a claim on the business's profits and an obligation for its debts.

Corporation

A legal entity that is separate and distinct from its owners, who are known as shareholders, and has its own rights and obligations.

Financial Reports

Documents that provide an overview of a company's financial condition, including income statements, balance sheets, and cash flow statements.