Assume that the demand for a product is given by P = 20 - Q and that the companies' private marginal cost for producing the product is given by MC = 10. However, each unit produced also gives rise to harmful emissions whose socialcost corresponds to 5.

a) Assume first that there is perfect competition and show the equilibrium in a diagram. Calculate any efficiency losses that occur in this situation and explain where they exist.

b) Now assume that all but one company leaves the market so that a monopoly arises. Show the new equilibrium in a figure and explain if there are any efficiency losses in this situation.

c) After the company has become a monopolist, the government decides to impose an environmental tax corresponding to the social cost of the emissions on the company's production (ie 5 per unit produced). Show the new equilibrium and calculate any efficiency losses.