A chemical manufacturer dumps waste into a river, which harms ...

[hubes95]

A chemical manufacturer dumps waste into a river, which harms owners of resorts downstream from the chemical factory. Which of the following best describes the situation?
 a. The socially efficient level of output exceeds the chemical firm's privately optimal output level.
 b. River pollution should be reduced until it is technologically impossible to reduce it further.
 c. The firm's privately optimal output level exceeds the socially efficient level of output.
 d. If the firm were forced to bear the external costs of dumping chemicals into the river, it would increase its production of output.

Question 2

A country with a strong bargaining power is likely to direct the terms of trade in its favor.
 a. True
  b. False
  Indicate whether the statement is true or false

[wshriver]

Answer to Question 1

c

Answer to Question 2

True