Refer to the figure below. The socially optimal level of output could be achieved by imposing a tax on each unit equal to the distance ________.

A)EG
B)AC
C)EF
D)BC

Name: Refer to the figure below. The socially optimal level of output could be achieved by imposing a tax on each unit equal to the distance ________. A)EG B)AC C)EF D)BC
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Question

Refer to the figure below. The socially optimal level of output could be achieved by imposing a tax on each unit equal to the distance ________.  
  
A)EG 
B)AC 
C)EF 
D)BC

Quizplus · Accepted Answer

A tax equal to the vertical distance between the social MC curve and the private MC curve would lead to the socially optimal level of output.

Refer to the Figure Below