Figure 10-2 -Refer to Figure 10-2.Assume the Production of the Product Shown

question 66

Multiple Choice

Figure 10-2

-Refer to Figure 10-2.Assume the production of the product shown by the graph imposes a cost on society of $7.00 per unit.If the free market equilibrium output is 50 units,the government should

• A)impose a tax of $2.50 per unit.
• B)increase the output of the firm by 25 units.
• C)impose a lump-sum tax of $350 per period.
• D)impose a tax of $7.00 per unit.