For the following question, recall the model of retail disposal charges presented in chapter 18 of Callan and Thomas. Follow the same conventions of that model where you consider the harmful effects of battery disposal to be part of the demand side of the market (i.e. the benefit side) rather than the supply side (the cost side). Let MSC denote the marginal social cost of production, let MPC denote the marginal private cost of production, let MPB denote the marginal private benefit of consumption, let MSB denote the marginal social benefit of consumption, let MEB denote the marginal external benefit of consumption, let Q_C denote the private (i.e. competitive) market equilibrium quantity of batteries, and let Q_E denote the socially efficient quantity of batteries.

Suppose that Sweden imposes a retail disposal charge on household batteries. To assure that allocative efficiency is achieved, this charge should be set equal to:

the vertical distance between MSB and MPB at QC

the marginal social benet at QE

the MPC associated with battery production

the MEB at the ecient equilibrium

none of the above