The drainage of waste products from the chemical factory, Ultra Chemicals, situated along the banks of the Misty River has led to the formation of a dead zone in the river that cannot support aquatic life.

1. Without any government intervention, will Ultra Chemicalsproduce a socially optimal quantity? Why or why not? Explain your answer with the help of a suitable diagram.
2. Does Ultra Chemicals imposea deadweight loss on society? Explain. Use your diagram to show the deadweight loss to society.
3. How can agovernment intervene to improve upon the outcome from society's point of view? Explain. Diagram not needed.