Question: Point A = cross between Marginal private cost and demand, Point B = cross between Marginal social cost and demand. b. Equilibrium price = $7

Point A = cross between Marginal private cost and demand, Point B = cross between Marginal social cost and demand. b. Equilibrium price = $7 (Point A's y-axis) Equilibrium quantity = 180 (Point A's X-axis) c. Socially efficient price = $8 (Point B's y-axis) Socially efficient quantity = 120 (Point B's X-axis) d. The graph implies that the cigarettes produce a negative externality. The marginal external cost of smoking is $3

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