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.There is an emissions tax of $t per unit of pollution.Which of the following statements regarding the pollution abatement activities by the two firms is correct?

A) It is not socially optimal to have Firm X doing pollution abatement of Q_X while Firm Y does the lesser amount,Q_Y.
B) It is efficient for Firm Y to do less pollution abatement than Firm X because Firm Y faces higher costs of abatement.
C) The emissions tax causes no change in the firms' polluting activity.
D) The shaded areas in the two graphs depict the social costs of pollution caused by Firms X and Y.
E) The emissions tax causes an optimal level of pollution.