Use the figure below to answer the following questions.
Figure 16.2.1
-Refer to Figure 16.2.1.The figure shows the private marginal cost curve,the social marginal cost curve and the market demand curve.If a constant per unit tax is imposed that generates an efficient allocation of resources,then the quantity produced is

Question

Use the figure below to answer the following questions.

Figure 16.2.1
-Refer to Figure 16.2.1.The figure shows the private marginal cost curve,the social marginal cost curve and the market demand curve.If a constant per unit tax is imposed that generates an efficient allocation of resources,then the quantity produced is

Quizplus · Accepted Answer

When a constant per unit tax is imposed that generates an efficient allocation of resources, the new social marginal cost curve shifts upwards by the amount of the tax. This creates a new intersection point with the demand curve at a lower quantity and higher price than the previous equilibrium point. The quantity produced is where the new social marginal cost curve intersects the demand curve, which is at point Q₂ in this case.

Use the Figure Below to Answer the Following Questions