1. The market for paper in a particular region has the supply and demand curves QB = 160,000 2, OOOP Q5 2 40, 000 + 2, OOOP, where Q is measured in hundredpound lots, and P is price per hundred-pound lot. There is currently no attempt to regulate the dumping of efuent into streams and rivers by the paper mills. As a result, dumping is widespread. The marginal external cost associated with the paper production is given by the expression MEG = 0.0002Q. (a) Calculate the competitive price and output, assuming that no attempt is made to monitor or regulate the dumping of efuent. (b) Determine the socially optimal levels for price and output. If your answers in (a) and (b) are different, explain the source of the difference. (c) Sketch a diagram showing the costs or benefits to society of allowing the market to operate in an unregulated fashion