1. The factory of Hair-Puffs Inc. produces hair-wigs. As a by-product of this wig production, it also produces dangerous emissions of toxic gases(as a result of the strong glue used to hold the hair in place). The De-Lite car factory, down the road, experiences a negative externality from this production process. Suppose that the supply curve (private marginal cost) for the wig factory is of normal upward slope, and it faces a market demand or marginal benefit curve, also of normal slope. The marginal damages caused by the production of wigs slopes upward as you can imagine. Using the typical supply and demand diagram: d. Show the area of a Pigouvian Tax were the government to use this tax to create a socially efficient level of production. 2. Why is it not necessary to compensate either Hair-Puffs or De-Lite for welfare losses using the receipts of the Pigouvian Tax?