According to the above figure, if steel mills are charged an effluent fee in order to bear the cost of pollution, what happens to the equilibrium price and equilibrium quantity?
A. They change from P2 and Q2 to P1 and Q1.
B. They change from P1 and Q1 to P2 and Q2.
C. They are unchanged.
D. The equilibrium price increases from P1 and P2, but the equilibrium quantity is unchanged.
Answer: B
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