Question: 6. Price $14 S = MSC $12 $10 D' = MSB $8 D = MPB 90 100 110 Quantity The graph above depicts the marginal

 6. Price $14 S = MSC $12 $10 D' = MSB

6. Price $14 S = MSC $12 $10 D' = MSB $8 D = MPB 90 100 110 Quantity The graph above depicts the marginal private benefit (MPB), the marginal social benefit (MSB), and the marginal social cost x of producing a good. Which of the following correctly identifies both the problem illustrated in the graph and the remedy to the problem? A Negative externality; a corrective per-unit tax equal to the external cost of $2 will lead to the socially optimal output. Negative externality; a corrective per-unit tax equal to the external cost of $4 will lead to the socially optimal output. C Positive externality; a corrective per-unit subsidy equal to the external benefit of $2 will lead to the socially optimal output. Positive externality; a corrective per-unit subsidy equal to the external benefit of $4 will lead to the socially optimal output. Positive externality; a corrective per-unit tax equal to the external benefit of $6 will lead to the socially E optimal output

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