19.2

a. If the market price is $20 per widget and the firm's marginal cost is given by MC 0.44, where q is the daily widget production for the firm, how many widgets will the firm produce?

b. Suppose a government study has found that the firm's new process is polluting the air and estimates the social marginal cost of widget production by this firm to be SMC = 0.5g. If the market price is still $20, what is the socially optimal level of production for the firm? What should be the rate of a government-imposed excise tax to bring about this optimal level of production?

c. Graph your results.