Figure 5C -Refer to Figure 5C. in Figure 5C, a Polluting Firm

Figure 5C

-Refer to Figure 5C. In Figure 5C, a polluting firm is subjected to an effluent charge of tk per unit of emission. Assume that the shift of this firm's marginal control cost curve
from MCC0 to MCC1 is caused by an introduction of a new and improved method of
pollution control. Which of the following statements does not apply to Figure 5C?

A) The ability to shift from MCC0 to MCC1 implies that firms can be provided with
incentives to reduce their pollution through improved technological.
B) When compared to emission standards, a policy based on effluent charge will
provide smaller financial incentives to investors in pollution control technology.
C) Before the introduction of the new technology, the firm is discharging 1,000 units
of its waste.
D) Before the introduction of the new technology, for discharging 1,000 units, the
regulatory agency would be able to collect effluent tax of $5,000.