Exhibit 31-3 -Refer to Exhibit 31-3.Suppose That Firms A,B,and C Are the A,B,and

Multiple Choice

Exhibit 31-3

-Refer to Exhibit 31-3.Suppose that Firms A,B,and C are the only polluters in the state and that each emits 4 tons of pollution into the atmosphere.To cut the level of pollution the government imposes an emission tax of $300 per ton of pollution. As a result of this tax,Firm A would _________________,firm B would ____________________ and firm C would __________________.

A) not reduce any of its pollution; not reduce any of its pollution; reduce all 4 tons of its pollution
B) reduce all 4 tons of its pollution; only reduce 1 ton of its pollution; not reduce any of its pollution
C) reduce all 4 tons of its pollution; reduce all 4 tons of its pollution; not reduce any of its pollution
D) not reduce any of its pollution; reduce 3 tons of its pollution; reduce all 4 tons of its pollution