Q2.1 A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the MPC and MSC of the robot factory production. The robot market is competitive and the market price is 340. Based on this information, which of the following statements is correct? Explain your answers.

a. The efficient level of output is the factory's profit-maximising quantity, which is 120.

b. The efficient level of output is 0, where there is zero marginal external cost to the nurses.

c. At Q = 120, both the factory and the nurses would benefit from the nurses paying a fee less than 120 to the factory to reduce output.

d. At Q = 80, both the factory and the nurses would benefit from the factory paying a fee less than 80 to the nurses to increase output.

please use formulas, calculation and graphs to explain

600 MSC 500 460 400 MPC Costs ($) 300 P = 340 260 200 100 0 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 Output