Firm 1 Produces Output X with a Cost Function C₁(x)=

Multiple Choice

Firm 1 produces output x with a cost function c₁(x) = x² + 10.Firm 2 produces output y with a cost function c₂(y, x) = y² +x.Thus, the more that firm 1 produces, the greater are firm 2's costs.Both firms face competitive product markets.The competitive price of x is $20 and the competitive price of y is $40.No new firms can enter the industry and the old ones must remain.The efficient Pigouvian tax on the x good is

A) $0.
B) $1.
C) $2.
D) $3.
E) $4.