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Figure 10-6 A graph of price, P, versus quantity, Q, shows a supply curve, Private Cost, rising linearly from (50, 7) to (450, 17), a
Figure 10-6 A graph of price, P, versus quantity, Q, shows a supply curve, Private Cost, rising linearly from (50, 7) to (450, 17), a second supply curve, Social Cost, rising linearly above the first supply curve from (50, 15) to (450, 26), and a demand curve, D, descending linearly from (75, 34) to (450, 4). Curve Private Cost and Curve D intersect at point (325, 14). Curve Social Cost and Curve D intersect at point (250, 20). Point (250, 12) is marked on Curve Private Cost. Refer to Figure 10-6. In order to reach the social optimum, the government could a. offer a subsidy of $6 per unit on plastics. b. impose a tax of $8 per unit on plastics. c. impose a tax of $2 per unit on plastics. d. impose a tax of $6 per unit on plastics
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