A firm pollutes a local river and causes damage to a river-swim club that is located downstream. The line MB represents the firm’s Marginal Benefit from polluting (think of this curve as Mπ in Callan and Thomas notation) and the line MC represents the Marginal Cost of the pollution damages to the swimmers (think of this curve as MEC in Callan and Thomas notation). At first glance this problem may seem unusual in that it puts pollution (Q) on the horizontal axis rather than firm output, but you should assume that pollution is a by-product of the firm’s output. State your answers to each of the following questions in terms of the areas A, B, C, D, E, and F. Given the information in the above graph, you know that the socially efficient (allocatively efficient) outcome is Q* amount of pollution. Please explain why you know this. What area represents society’s net social benefits at Q*?First assume the firm acts in its own self-interest but ignores the swim club (e. g. no bargaining which differs from Coase’s approach).i. Would the firm want to produce output associated with pollution level Q* or produce with full pollution?ii. What area represents society’s net social benefits at the non-bargaining private outcome?iii. What area represents the DWL of the private non-bargaining outcome compared to the socially efficient outcome Q*?