Refer to the above figure. It represents supply and demand for The Black Ash Steel Company's output. The firm's plant belches large quantities of smelly fumes and black ash into the air

Residents in the surrounding area have higher medical bills as a result. If the firm is forced to pay the full social cost of its production, what will occur? A) Black Ash's supply curve will shift from SA to SB.
B) Demand for the firm's steel will shift to the left.
C) The company's supply curve will shift from SB to SA.
D) Black Ash will increase its own output to cover the cost increase.

C