Refer to the provided supply and demand graph for a product. In the graph, line S is the current supply of this product, while line S₁ is the optimal supply from the society's perspective. If government corrects this externality problem and shifts production to the socially optimal level, then the product price will be equal to
A)G.
B)F.
C)E.
D)D.

Question

Refer to the provided supply and demand graph for a product. In the graph, line S is the current supply of this product, while line S₁ is the optimal supply from the society's perspective. If government corrects this externality problem and shifts production to the socially optimal level, then the product price will be equal to
A)G. 
B)F. 
C)E. 
D)D.

Quizplus · Accepted Answer

The Answer of  Refer to the provided supply and demand graph for a product. In the graph, line S is the current supply of this product, while line S₁ is the optimal supply from the society's perspective. If government corrects this externality problem and shifts production to the socially optimal level, then the product price will be equal to
A)G. 
B)F. 
C)E. 
D)D.

Refer to the Provided Supply and Demand Graph for a Product