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Color Mate Inc., a company that produces interior and wall paints,...

Color Mate Inc., a company that produces interior and wall paints, dumps its chemical waste in a river. Which of the following is likely to be true in this case?


  • The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

  • The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

  • The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

  • The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.


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