A fracking company can pick among two 'fracking fluids', creatively called Type-A and Type-B, that are pumped into bedrock formations in order to extract natural gas. Both fluids generate the same amount of revenues per gallon of fluid used, both fluids create the same wear-and-tear on other machinery and equipment used in the fracking process, both fluids have the same tax treatment, but Type B fluid has a lower cost per gallon. Everyone knows that Type-B fluid also pollutes ground water to a greater extent but since the source of the pollution is hard to determine and since it cannot be verified which fluid is used by which fracking site, management is not worried about being blamed nevermind punished for environmental pollution (the probability of being fined is zero).

Answer the below questions -

2. Purely from the perspective of maximizing shareholder value, which fluid should management use and why? (make reference to at least one relevant finance concept)
4. Given the negative externalities associated with Type-B fluid, how can companies be encouraged to use Type-A instead, and why does it work? Think creatively--policy, regulation etc.
6. One day, it is suddenly discovered that a public firm has been using Type-B fluid even though they claimed to be using Type A. What is the stock price response, why?