Figure: Negative Externality
The figure shows the market for a good that causes a negative externality when consumed. The government decides to begin taxing its producers. Using the information provided in the figure, answer the following questions.
a. What is the market quantity in this market?
b. What is the social cost of the product?
c. When the product is taxed, what is the dollar amount of the deadweight loss that is removed from the market?
d. What is the new efficient quantity in this market after the tax has been imposed?

Question

Figure: Negative Externality  
The figure shows the market for a good that causes a negative externality when consumed. The government decides to begin taxing its producers. Using the information provided in the figure, answer the following questions.
a. What is the market quantity in this market?
b. What is the social cost of the product?
c. When the product is taxed, what is the dollar amount of the deadweight loss that is removed from the market?
d. What is the new efficient quantity in this market after the tax has been imposed?

Quizplus · Accepted Answer

The Answer of Figure: Negative Externality  
The figure shows the market for a good that causes a negative externality when consumed. The government decides to begin taxing its producers. Using the information provided in the figure, answer the following questions.
a. What is the market quantity in this market?
b. What is the social cost of the product?
c. When the product is taxed, what is the dollar amount of the deadweight loss that is removed from the market?
d. What is the new efficient quantity in this market after the tax has been imposed?