Answer all the below Questions A B F H G SMC E K L M N R

Answer all the below Questions

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A B F H G SMC E K L M N R 20 V W x Y 0 S T U Z 4 Externality a) In the above figure, there is (positive/negative). b) What is the free market equilibrium quantity? c) What is the socially efficient quantity? externality. d) At the free market equilibrium quantity, what is the total cost to society of the externality? (4 pts) e) Suppose the optimal Pigouvian tax is imposed, raising the equilibrium price to social marginal cost. What is the government revenue from the tax? f) If the optimal Pigouvian tax is imposed, what is the change in total surplus? A B F H G SMC E K L M N R 20 V W x Y 0 S T U Z 4 Externality a) In the above figure, there is (positive/negative). b) What is the free market equilibrium quantity? c) What is the socially efficient quantity? externality. d) At the free market equilibrium quantity, what is the total cost to society of the externality? (4 pts) e) Suppose the optimal Pigouvian tax is imposed, raising the equilibrium price to social marginal cost. What is the government revenue from the tax? f) If the optimal Pigouvian tax is imposed, what is the change in total surplus?

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answer a In the above figure there is a negative externality Externality refers to the cost or benefit incurred by a third party who is not directly i... View the full answer