There is a growing trend where society is increasingly expecting firms to be corporate socially responsible: where firms need to be considerate of their actions on society and the broader environment.

a.$$Suppose negative externalities are produced alongside output in a firms production process. If the firms objective is to maximise profit, explain why they do not want to be corporate socially responsible.

b$$Anticipating it to be affected by overly harsh government environmental protection regulation, a firm decides to self−$-$regulate by adopting corporate social responsibility as its objective. Explain how this will affect the firms output level. What will happen to the negative externalities that it produces? 

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