A Paper Mill That Degrades River Water While Producing Its

Multiple Choice

A paper mill that degrades river water while producing its product creates a divergence between private and social costs if,and only if,the

A) mill treats the water to restore its quality before returning it to the river.
B) mill dumps the degraded water back into the river, for which privilege it pays a high levy to towns downstream.
C) price of the paper produced there includes the cost of water treatment.
D) mill treats the water to restore its quality, for which service it is appropriately compensated by the towns downstream.
E) water is dumped back into the river in an untreated state with no compensation paid to downstream users.