Question: The following graph (see link below) provides a stylised representation of the effects of the policy proposed by the government to correct for the externality

The following graph (see link below) provides a stylised representation of the effects of the policy proposed by the government to correct for the externality (in the graph, S2 is the supply curve after the policy is implemented).

http://bit.ly/2MNtbYd

If the policy is implemented, what is the price-quantity combination determined by the market?

A.P4, Q2

B.P2, Q2

C.P3, Q3

D.P3, Q1

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