Suppose That the City of Cleveland Has Set an Emissions

Multiple Choice

Suppose that the city of Cleveland has set an emissions tax to reduce the amount of pollution going into the Cuyahoga River. Assume that the optimal tax would be $700 but that government officials have set the tax at $1,200. At the equilibrium with the $1,200 tax:

A) there will be too much pollution.
B) the marginal social cost of pollution will be less than $1,200.
C) the marginal social benefit of pollution will be $1,200.
D) the marginal social benefit of pollution will be more than $1,200.