Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps sludge into a nearby river, creating a negative externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $300. The following graph shows the demand (private value) curve and the supply (private cost) curve for electric cars. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $300 per unit. (? ) 1000 900 Social Cost 800 700 600 500 Supply PRICE (Dollars per unit of electric cars) (Private Cost) 400 O Demand 300 (Private Value) 200 100 0 2 6 QUANTITY (Units of electric cars) The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is units. To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a of $ per unit of electric cars