It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river.Operators of hydroelectric generating plants on the river find they must clean up the river's water before it flows through their equipment. Refer to the above information.If nothing is done to correct this situation:
A) there will be an overallocation of resources to the production of electricity.
B) there will be an underallocation of resources to the production of paper goods.
C) there will be an overallocation of resources to the production of paper goods.
D) the price of electricity will be lower than it should be.

Question

Quizplus · Accepted Answer

If nothing is done to correct the situation, the paper mills will continue to discharge waste products into the river, leading to an overallocation of resources to the production of paper goods. However, this will also result in a decrease in the quality of the river's water, forcing hydroelectric generating plants to spend more resources cleaning up the water before it flows through their equipment. This may lead to a decrease in the production of electricity, but it wouldn't necessarily result in an underallocation of resources to the production of paper goods or a lower price of electricity.

It Is the Custom for Paper Mills Located Alongside the Layzee