Please Answer All Questions And Explain Your Answer. Thank you.

Question 4: The graph below represents the gasoline industry. Answer the next questions using this graph. 4.1. Does the industry create a negative or positive externality? Briey explain. (0.5 points) 4.2. Without any government intervention, what are the equilibrium price and quantity? (0.5 points) 4.3. What are the socially optimal price and quantity? (0.5 points) 4.4. What is the size of the external cost in this market? (0.5 points) 4.5. Give an example of a policy that would internalize this external cost in this industry. Briey explain. (1 point) [-J 8.5 Price Social Cost Private Cost Demand 200 500 650 Quantity