One possible method for reducing emissions of greenhouse gases such as carbon dioxide is to inject the gases into deep saltwater-laden rock formations where they would be trapped for thousands of years. Suppose that the federal government provides a fixed per-unit subsidy to firms that utilize this technology in West Virginia and other locales where such rock formations are known to exist. a. Consider the graph to the right. It depicts a firm that produces and sells equipment that injects greenhouse gases into underground rock formations. Upper D is the market demand curve facing the firm and MR is the firm's marginal revenue curve. MC 1is the initial marginal cost of the firm producing pollution abatement equipment. After receiving the subsidy from the federal government, the firm's marginal cost decreases to MC 2. After the firm receives the government subsidy, its market clearing price and quantity for pollution abatement equipment are shown on the graph as A. point C. B. point D. C. point B. D. point A. Part 5 b. The cost of this government subsidy is ultimately borne by A. the firms producing the equipment. B. the taxpayers. C. the government. D. the polluting firms