Consider the information in the file HW7 Negative Production Externality. In the absence of any government intervention, the production amount would be units and the total surplus, ignoring the external harm done by the externality, would equal dollars. The total externality harm done to society would be dollars so that the total surplus net of the total harm would equal dollars. Production of a commodity in a perfectly competitive market imposes $40 of marginal external cost on the society. The following graph shows the marginal private cost (same as supply) and marginal private benefit (same as demand) functions. $108 5104 5100 = {:p) Y Y:7 8 S80 Y ) S64 =] S56 Y] YL Y. Vk S40 k] k7 pL: S24 p.1] 5[ i ) S Y | S0