10. If a company pollutes while making its product, the market outcome will be inefficient. We can use government policy to regulate this company in order to reduce pollution. a. If the government imposes stricter pollution regulation on this company, will supply increase or decrease? b. Based on your answer to the previous question, what will happen to equilibrium price and quantity? c. Why might an economist consider this outcome more efficient than the market equilibrium before the pollution control was in effect (Hint: think about the effect on others}? 11. Adverse selection problems are types of information problems where one side of the market (usually buyers} does not have as much information as sellers and are therefore less willing to take risks on goods. a. If buyers do not have enough information to make an informed decision about a product, will this affect demand? Will it increase or decrease demand? Explain your answer- b. What will happen to equilibrium price and quantity as a result of this change, if anything? C. Is this market equilibrium efficient? Why or why not