Figure 6A -Refer to Figure 6A. Why Do the Two Firms Not

Figure 6A

-Refer to Figure 6A. Why do the two firms not pollute at points R and S respectively when pollution credits and regulations exist ?

A) They do because the points R and S are Pareto optimal.
B) They do not because only point R is Pareto optimal.
C) They do not because only point S is Pareto optimal.
D) They do not because point E is Pareto optimal.
E) They do because their marginal control costs are minimized at points R and S.