-In the figure above, if a tax is imposed that generates an efficient allocation of resources, then consumers will pay a price of
A) $250 per unit.
B) $200 per unit.
C) $150 per unit.
D) $100 per unit.

Question

-In the figure above, if a tax is imposed that generates an efficient allocation of resources, then consumers will pay a price of
A) $250 per unit. 
B) $200 per unit. 
C) $150 per unit. 
D) $100 per unit.

Quizplus · Accepted Answer

An efficient allocation of resources occurs when the price reflects the true cost of production, including any externalities. If a tax is imposed to correct for an externality, the price consumers pay will be the one that reflects the efficient market outcome, which is $200 per unit in this context.

-In the Figure Above, If a Tax Is Imposed That