Suppose the Private Marginal Cost of Pumping Water from an Aquifer

Multiple Choice

Suppose the private marginal cost of pumping water from an aquifer remains constant as the quantity of water pumped increases, and the marginal social cost is upward sloping. If the demand for water shifts to the right as population increases, then the amount of water pumped based only on private costs ________ and the social cost of the common property resource ________.

A) decreases; decreases.
B) decreases; increases
C) increases; decreases
D) increases; increases