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.The resulting amount of pollution abatement is socially optimal if

A) Firm X abates Q_X and Firm Y abates Q_Y.
B) each firm abates at Q_R.
C) the emissions tax causes no change in firms' polluting activity.
D) the emissions tax is equal to the marginal social cost of pollution.
E) each firm pays the maximum amount of tax.