If Air Pollution from a Coal Mine Imposes External Costs

Multiple Choice

If air pollution from a coal mine imposes external costs on people who live near the mine and the victims of the pollution could not legally enforce the right of their property not to be damaged, which of the following would be true concerning the amount of pollution reduction?

A) It would be significantly less than if the owners of the smelter were legally liable for damages.
B) It would be less than the amount at which the marginal benefit of pollution reduction equaled the marginal cost.
C) It would be the same as if it would be if the owners of the smelter were legally liable.
D) It would be too small; the government would have to intervene to bring about an efficient outcome.