The effect of negative externalities on the optimal quantity of consumption

(please include what the grapgh would look like with the social cost graphed)

Consider the market for electric cors. Suppose that a electric car manufocturing facility dumps sludge into a nearby river, creating a negative extemality for those living downstream from the facility. Producing additional electric cars imposus o constant per-unit external cost of 1160 . The following graph shows the demand (brivate value) curve and the supply (orivate cost) curve for electric cors. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $180 per unit. The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is units: To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could irmpose a per unit of electric cars