A Paper Mill Discharges Chemicals into a River Which Pollutes

Multiple Choice

A paper mill discharges chemicals into a river which pollutes the shores of a downstream resort area.The private marginal cost,social marginal cost,and marginal benefit associated with the production of paper are given by the following equations: MC_P = 5 + Q = 10 + 2Q
MB = 35 - 0.5Q.
A competitive free market will produce output of ________ units,and this amount is ________ than the allocatively efficient level of output.

A) 5; less
B) 10; less
C) 15; more
D) 20; more
E) 25; more