Smoking creates negative externalities for the society by causing higher health costs, more lost days of working and fire, smoke and odor damage

a) Illustrate the market for cigarettes, labeling demand curve, the social-value curve, the supply curve, the market equilibrium level of output, and the efficient level of output.

b) On your graph, shade the area corresponding to the deadweight loss of the market equilibrium.

c) Economists estimated that the annual cost of negative externalities created by smoking is 60 billion dollars in the United States. It is also known that approximately 30 billion packs of cigarettes are smoked annually. If the government is to impose a corrective tax on each pack of cigarettes, what would be the amount of ideal (socially efficient) per pack tax?