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The demand for gasoline in a country is given by QD = 15 - 2p and the supply by QS = 3p, where the price
The demand for gasoline in a country is given by QD = 15 - 2p and the supply by QS = 3p, where the price is in dollars per gallon. The negative externality associated with carbon is $2 per gallon. In an unregulated market for gasoline, the deadweight loss associated with the externality is:
a. 2
b. 1.2
c. 0
d. 2.4
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