Environment Canada Has Proposed Strict Controls on the Amount of Sulphur

Multiple Choice

Environment Canada has proposed strict controls on the amount of sulphur contained in diesel fuel.The effect of the regulation is estimated to increase the equilibrium price of a litre of diesel fuel by 10 cents.Assuming the supply curve of diesel fuel has a positive slope and the demand curve has a negative slope,one can infer that

A) the external benefit of diesel fuel is less than 10 cents.
B) the external cost of diesel fuel is greater than 10 cents.
C) the external cost of diesel is less than 10 cents.
D) the external cost of diesel is equal to 10 cents.
E) the external benefit of diesel is equal to 10 cents.