Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $300 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $300 per ton. 1500 350 O Social Cost 1200 1050 O 900 O Supply Private Cost) PRICE (Dollars per ton of steel) 750 600 Demand 450 (Private Value) 300 150 2 3 5 QUANTITY (Tons of steel) The market equilibrium quantity is * tons of steel, but the socially optimal quantity of steel production is _ tons. To create an incentive for the firm to produce the socially optimal quantity of steel, the government could impose a of $ per ton of steel.Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $300 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $300 per ton. 1500 1350 Social Cost 1200 O 1050 O 1.5 900 Supply (Private Cost) 2 750 PRICE (Dollars per ton of steel) 2.5 600 O Demand 2 450 Private Value) 3.5 300 4 150 4.5 0 2 3 5 QUANTITY (Tons of steel) 5 5.5 The market equilibrium quantity is * tons of steel, but the socially optimal quantity of steel production is t tons. of $ per ton To create an incentive for the firm to produce the socially optimal quantity of steel, the government could impose a of steel.Carbon dioxide emissions have been linked to global warming. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Tradable Command-and- Permit Corrective Corrective Public Policy Control Policy System Subsidy Tax The government charges factories $480 for every ton of carbon dioxide O O O O they emit. The government limits total carbon-dioxide emissions by all factories to 130,000 tons per decade. Each individual factory is given the right to emit O O O O 170 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. The government orders every factory to adopt a new technology, which O O O O reduces carbon-dioxide emissions into the atmosphere. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $480 to any citizen O O O O who plants a tree. Grade It Now Save & Continue Continue without saving