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 applies to Figure 5C?

A) Before the introduction of the new technology, for discharging 1,000 units, the
regulatory agency would be able to collect effluent tax equal to area F + G.
B) Before the introduction of the new technology, the area F + G + H represents the
combined expenditure of effluent tax and waste processing for this firm.
C) Before the introduction of the new technology, the area D + E + F + G + H
represents the combined expenditure of effluent tax and waste processing for this
firm.
D) After the new waste processing technology is adopted, area D + E represents the
total expenditure of this firm.
E) After the new waste processing technology is adopted, area E + H represents the