By reducing the costs imposed on the water treatment plant by the externality, the plant can

Question

Quizplus · Accepted Answer

By reducing the costs imposed on the water treatment plant by the externalities, the plant can produce more water without hurting the paper mill's revenues. This allows the plant to compensate the mill for any lost revenues and still increase their own output. Choosing option B would only harm the paper mill, and option C would decrease the plant's output and potentially harm the community that relies on the water supply. Therefore, option A is the best choice.

By Reducing the Costs Imposed on the Water Treatment Plant