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Figure 10-2 -Refer to Figure 10-2.Suppose That the Production of Plastic Creates

Question 308

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Figure 10-2 Figure 10-2 -Refer to Figure 10-2.Suppose that the production of plastic creates a social cost which is depicted in the graph above.If the government wanted to force the firm to internalize the cost of the externality,what action should it take? A) Impose a tax of $1.50 per unit of plastic. B) Impose a tax of $2 per unit of plastic. C) Impose a tax of $6 per unit of plastic. D) Offer a subsidy of $1.50 per unit of plastic.
-Refer to Figure 10-2.Suppose that the production of plastic creates a social cost which is depicted in the graph above.If the government wanted to force the firm to internalize the cost of the externality,what action should it take?


A) Impose a tax of $1.50 per unit of plastic.
B) Impose a tax of $2 per unit of plastic.
C) Impose a tax of $6 per unit of plastic.
D) Offer a subsidy of $1.50 per unit of plastic.

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