Use the following to answer question: Figure: Correcting for Market Failure -(Figure: Correcting for Market Failure)Use Figure: Correcting for Market Failure.There is an external cost in the market illustrated in the figure,and the two upward-sloping lines reflect private and social marginal costs.If the government forces the private-sector firms to internalize any external costs: A)the supply curve shifts to the right,from S₂ to S₁. B)the supply curve shifts to the left,from S₁ to S₂. C)the supply curve is unaffected. D)price per unit decreases.

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Internalizing the external cost would increase the private marginal cost for firms, causing them to produce less at any given price level. This means the supply curve would shift to the left, from S₁ to S₂, as shown in the figure. As a result, the price per unit would increase.

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