Article Link: https://bit.ly/3fbNtrF(Links to an external site.)

Refer to article and graph for questions please :)

1. The following graph provides a stylised representation of the effects of the policy proposed by the government to correct for the externality (in the graph, S2 is the supply curve after the policy is implemented).

Price of high emissions vehicles A D D Social - - - - Value - . Q , Q , Q3 Qy Quantity of high emissions vehiclesPrice of high emissions vehicles S 1 A - - P P2 F D + 50 D Social - = = Value - . - - Q , Q3 Qy Quantity of high emissions vehicles