Suppose a chemical manufacturing plant in a small town is discharging a toxic pollutant that makes its way into the drinking water. A number of residents get sick as a result and are forced to get medical care. The town passes an ordinance requiring the firm to install pollution control equipment to limit releases forcing the firm to raise the price of its product by 5% and lay off several workers. Discuss the benefits and costs of this pollution control project in detail, including the test to decide whether it should be undertaken.

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