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
MC_S = 10 + 2Q
MB = 35 - 0.5Q.
The marginal external cost at the competitive free-market equilibrium is

A) 5.
B) 10.
C) 15.
D) 20
E) 25.