The figure below shows a market with an externality. Price 52 31 h P2 Demand 0 02 01 Quantity If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does 51 represent? 0 the market supply curve reflecting implicit cost 0 the market supply curve reflecting external cost 0 the market supply curve reflecting marginal social cost 0 the market supply curve reflecting marginal private cost Companies producing paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental damage. The figure below illustrates the situation in the paper market. Price of paper Marginal social cost Marginal private cos! Marginal benet 0 O1 02 Q3 04 Quantity 0' paper Suppose the government imposes a tax of $50 per unit of paper to bring about the efficient level of production. What happens to the market price of paper? It remains the same because the tax is imposed on producers who create the externality. Q It rises by more than $50 per unit. 0 It rises by $50 per unit. 0 It rises by less than $50 per unit