Planting a tree improves the environment: trees transform greenhouse gases into oxygen, improve water retention in the soil, and improve soil quality. Assume that the value of this environmental improvement to society is $10 for the expected lifetime of the tree. The following table contains a hypothetical demand schedule for trees to be planted. Assume that the marginal cost of producing a tree for planting is constant at $20. a) Draw a diagram that shows the market equilibrium quantity and price for trees to be planted. b) What type of externality is generated by planting a tree? Draw a diagram that shows the optimal number of trees planted. How does this differ from the market outcome? c) On your diagram from part b), indicate the optimal Pigovian tax/subsidy (as the case may be). Explain how this moves the market to the optimal outcome. Price of Tree Quantity of trees demanded (thousands) $30 0 $25 6 $20 12 $15 18 $10 24 $5 30 $0 36Instructions: Answer the following questions. Please ensure that you provide all steps for mathematical solutions and label all your variables or parameters clearly. Graphs are to be drawn neatly and fully labelled. Formal language is required for written answers, including complete sentences and proper use of punctuation