Q. If a Monopolist is the sole producer of a goods in a market, and also produces pollution as a by - product : (i) A Pigovian fee will make matters worse.(ii) A Pigovian fee will make matters better.(iii) A Pigovian fee will raise cost of production and thus reduce output of the monopolised good even more, which increases the efficiency associated with monopoly.(iv)A Pigovian fee will lower the cost of production and thus reduce output of monopolised good even more, which will increase the inefficiency associated with the monooly.(v)A Pigovian fee will raise cost of production and thus reduce output of the monopolised good even more, which increases the ineffficiency associated with monopoly.

1. Only (i) and (ii) hold good.
2. Only (ii) and (iv) hold good.
3. Only (i) and (v) hold good.
4. Only (iii) and (ii) hold good.