A chemical factory discharges waste products into a river. The waste products affect a fishery downstream. Suppose MD = 6E and MAC = 600 - 4E. Consider a liability law requiring the polluter to compensate for all the damages caused. Draw a graph to show and calculate the following:

a) The socially efficient level of emission, and the total social cost related to this level of emission.

b) The chemical factory’s total compensation cost, total abatement cost, and total compliance cost with no pollution control.

c) The chemical factory’s total compensation cost, total abatement cost, and total compliance cost with zero pollution.

d) The factory’s optimal choice of emission level, the total compensation cost, the total abatement cost, and the total compliance cost at this level.