Comparing Private and Socially Optimal Outcomes with Externalities Page 1 of 1 Demand & Supply Graph $220 $200 SMC PMC $180 $160 $140 $120 Price $100 $80 $60 $40 PMB $20 $0 0 15 30 45 60 75 90 105 120 135 Quantity(5 What is the Private Market Equilibrium Price? $ What is the Private Market Equilibrium Quantity? There is a negative externality associated with this good which causes an external cost of $80 at every quantity, as shown above. (3 What is the Socially Optimal Price? $ What is the Socially Optimal Quantity? u Relative to the Private Market Equilibrium Price, the Socially Optimal Price (select from this menu) Relative to the Private Market Equilibrium Quantity, the Socially Optimal Quantity v' (select from this menu) is higher. ket, it is most likely that the Private Market will is lower. is the same. cannot be determined without additional information. d help the market reach the Socially Optimal Quantity and Price, which course of action would be best? 1D (select from this menu) What is the Private Market Equilibrium Price? $ There is a negative externality associated with this good which causes an external cost of $80 at every quantity, as shown above. () What is the Socially Optimal Price? $ What is the Socially Optimal Quantity? What is the Private Market Equilibrium Price? $ (> What is the Private Market Equilibrium Quantity? There is a negative externality associated with this good which causes an external cost of $80 at every quantity, as shown above. (> What is the Socially Optimal Price? $ What is the Socially Optimal Quantity? Relative to the Private Market Equilibrium Price, the Socially Optimal Price (select from this menu) Relative to the Private Market Equilibrium Quantity, the Socially Optimal Quantity (select from this menu) In the absence of any government intervention in this market, it is most likely that the Private Market will (select from this menu) If the government wanted to internalize this externality and help the market reach the Socially Optimal Quantity and Price, which course of action would be best? v' (select from this menu) A producer tax of $80 for each unit bought and sold. A consumer subsidy of $80 for each unit bought and sold. Do nothing