ng.cengage.com Lili Content MindTap - Cengage Learning CENGAGE |MINDTAP Q Search this cour Homework (Ch 10) Attempts Keep the Highest 173 3. The effect of negative externalities on the optimal quantityof consumption Tools Consider the market for pharmaceuticals. Suppose that a pharmaceutical factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing additional pharmaceuticals imposes a constant per-unit external cost of $105. The following graph shows the demand (private value) curve and the supply (private cost) curve for pharmaceuticals. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $105 per unit. 700 630 Social Cost 560 490 Supply 420 (Private Cost) PRICE (Dollars per unit of pharmaceuticals 140 O Demand d (Private Value) QUANTITY (Units of pharmaceuticals) MacBook Air 20 F3 GOD F4 - F6 FB F9 F10 4) F17 F2 FS F7O ng.cengage.com All Content MindTap - Cengage Learning CENGAGE MINDTAP Q Search this course Homework (Ch 10) O X ? udy Tools 700 Tips Social Cost Tips Supply (Private Cost) 6 8 8 8 8 8 8 8 PRICE (Dollars per unit of pharmaceuticals) Demand Private Value) O 5 QUANTITY (Units of pharmaceuticals) The market equilibrium quantity is _ units of pharmaceuticals, but the socially optimal quantity of pharmaceuticals production is units. To create an incentive for the firm to produce the socially optimal quantity of pharmaceuticals, the government could impose of s per unit of pharmaceuticals. Grade It Now Save & Continue Continue without saving MacBook Air - - F6 F7 39 F2 20 F3 BBB FA - FS W 5 P R T E F G H J K S D C B N M X