Consider a competitive polluting industry with identical firms and free entry. If the regulator sets an emission cap for each firm equal to the socially optimal long run level per firm, which of the following will characterize the long run impact of such an environmental policy on this competitive industry?

A. The industry size will be larger than the social optimum.

B. The output produced by each firm will be less than socially optimal.

C. The industry size will be smaller than the social optimum.

D. The output produced by each firm will be larger than socially optimal.

E. Total output and total pollution are greater than the social optimum.

Choose the correct answer from the options given below: