7. Correcting for negative externalities - Taxes versus tradable permits Automotive assembly plants emit particulate matter as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a negative externality of vehicle production. Suppose the U.S. government wants to correct this market failure by getting firms to internalize the cost of pollution. if the government can charge firms for pollution rights (the right to emit a given quantity of particulate matter). The following graph shows the daily demand for pollution rights. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 0 5 10 15 20 25 30 35 40 45 50 80 72 64 56 48 40 32 24 16 8 0 PRICE (Dollars per ton) QUANTITY (Millions of tons) Demand Graph Input Tool Daily Demand for Pollution Rights Price (Dollars per ton) 8 Quantity Demanded (Millions of tons) 45 Suppose the government has determined that the socially optimal