If price-taking firms are required to install wet scrubbers on their chimneys to meet EPA regulations and their costs increase as a result, we would expect
A)demand for the product to fall
B)the market supply curve to shift to the left
C)the long-run economic profit of individual firms in the industry to fall
D)the short-run economic profit of individual firms in the industry to remain unchanged
E)short-run profits to rise as the industry raises price more than the cost of pollution

Question

Quizplus · Accepted Answer

The installation of wet scrubbers increases production costs for firms, causing the market supply curve to shift to the left as firms produce less at each price level.

If Price-Taking Firms Are Required to Install Wet Scrubbers on Their