Social Cost Private Cost PRICE (Dollars per unit) Demand QUANTITY (Units) Which of the following options could be represented by this graph? O a. A local flower nursery growing flowers outside their shop for sale. b. Your neighbor's pollution from burning wet wood in their fireplace. O c. Everyone in a town getting their flu shots. O d. Companies innovating and creating new technologies that end up benefitting the public. Consider this following graph Private Cost P2- B E PMarket F C Pi D Social Benefit D (private benefit) Q 0 QMARKET QOPTIMUM In order to achieve the optimal quantity, the government should implement a corrective (tax/subsidy) Consider the following graph of a positive externality, External benefit Private Cost P2- PMarket PA Social Benefit D (private benefit) 0 QMARKET QOPTIMUM Q Which of the following accurately describes the size of an appropriate subsidy issued by the government to achieve QOptimum? O a.P2 O b.P2 - PMarket O c. QOptimum - QMarket O d. P2-P1