-A chemical factory and a fishing club share a lake. The marginal social costs, private marginal costs, and marginal benefits from producing chemicals are in the figure above. The chemicals dumped into the lake have always harmed the fish, but now they begin to damage the fishing boats as well. As a result, the

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The marginal social cost curve shifts leftward because the damage to the fishing boats increases the social cost of producing chemicals.

-A Chemical Factory and a Fishing Club Share a Lake