A policy is approved that requires a company near a large city to keep its smokestack pollution to new lower levels,costing the company $2 million in additional equipment which will last at least 10 years)and $100,000 a year in additional labor.Lowering the air pollutants in the region is expected to save $4 million in medical expenses in the region over the next 10 years.Which of the following can be inferred from this information?
A)The company appears to lose money because of the policy,but it may decide to pass the costs along to consumers.
B)The company will save approximately $1 million over the next 10 years by implementing the new equipment.
C)The cost of the new equipment outweighs the benefit of its implementation.
D)Taxpayers will save approximately $1 million if the company implements the new equipment.

Question

Quizplus · Accepted Answer

Although the policy will save $4 million in medical expenses, the company will have to spend $2 million on new equipment and $100,000 annually on labor. This suggests that the cost of implementing the policy will be greater than the benefit to the company. The company may try to pass on the costs to consumers, which would allow them to recoup some of the expenses.

A Policy Is Approved That Requires a Company near a Large