Economics 9708 · AS & A Level · 7.4

7.4 — practice question

The diagram illustrates the market for a good that generates a negative externality in production and no positive externalities. The present level of consumption is OQ1. The government chooses to impose a tax on producers of the good. What size of tax on producers would lead to a socially efficient allocation of resources?

  • AVW
  • BVX
  • CVY
  • DVZ

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