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Provide a real world example and graphically illustrate a negative production externality. Graphically demonstrate how the following tools might be used to arrive at the
Provide a real world example and graphically illustrate a negative production externality. Graphically demonstrate how the following tools might be used to arrive at the socially optimal level of output: 1) taxation; 2) production quantity controls. Discuss the role of incentives and the likely distributional implications of your graphical solutions. Be sure to label all components of your graph. (20 points)
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