The Diagram Below Shows the Marginal Cost of Pollution Abatement

Multiple Choice

The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y. FIGURE 17-6
-Refer to Figure 17-6.Ignore the horizontal line at t.If the government wanted to impose an emissions tax,efficiency requires that it

A) levy a tax at the same rate to both firms.
B) choose a different tax rate for each firm so that each firm abates Q_R units of pollution.
C) impose the same tax on both firms and also fix the amount of pollution abatement at Q_R for each firm.
D) tax only the high-cost firm (Firm Y) and fix the amount of pollution abatement for the low-cost firm (Firm X) .
E) tax only the low-cost firm (Firm X) and fix the amount of pollution abatement for the high-cost firm (Firm Y) .