If Price-Taking Firms Are Required to Install Wet Scrubbers on Their

Multiple Choice

If price-taking firms are required to install wet scrubbers on their chimneys to meet EPA regulations and their costs increase as a result, we would expect

A) demand for the product to fall
B) the market supply curve to shift to the left
C) the long-run economic profit of individual firms in the industry to fall
D) the short-run economic profit of individual firms in the industry to remain unchanged
E) short-run profits to rise as the industry raises price more than the cost of pollution