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The private demand for coal equals 8,400 40*Price. The supply of coal equals 160*Price. Because of the external costs associated with coal burning, the social
The private demand for coal equals 8,400 40*Price. The supply of coal equals 160*Price. Because of the external costs associated with coal burning, the social demand for coal equals 8,400 40*(Price + 10). The social optimum (which recognizes the external costs of coal burning) could be realized by Question 50 options: 1) imposing a $5 tax on producers and a $5 tax on consumers. 2) imposing a $10 tax per unit on producers. 3) imposing a $10 tax per unit on consumers. 4) all of the above
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