Figure 10-8 -Refer to Figure 10-8. If the Government Wanted to Tax

Multiple Choice

Figure 10-8
-Refer to Figure 10-8. If the government wanted to tax or subsidize this good to achieve the socially-optimal level of output, it would

A) introduce a subsidy of $2 per unit.
B) impose a tax of $2 per unit.
C) introduce a subsidy of $4 per unit.
D) impose a tax of $4 per unit.