Suppose Johnson's Rubber Factory belches black smoke into the air over the city of Bellowsville. If the city of Bellowsville attempts to internalize the external costs associated with the production of rubber with a pollution tax, then we expect

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A pollution tax would increase the cost of production for Johnson's Rubber Factory, leading to a decrease in supply. This decrease would be reflected in a leftward shift of Johnson's supply curve. By internalizing the external costs of pollution, the city of Bellowsville is effectively making Johnson's bear the full costs of their production, which can help encourage them to adopt more environmentally-friendly practices.

Suppose Johnson's Rubber Factory Belches Black Smoke into the Air