Multiple Choice
Use the following to answer questions:
Figure: Marginal Private Benefits and Marginal Social Benefits
-(Figure: Marginal Private Benefits and Marginal Social Benefits) Look at the figure Marginal Private Benefits and Marginal Social Benefits. One way for the government to achieve this socially optimal level is by:
A) imposing a per-unit tax equal to P1 - P2.
B) providing a per-unit subsidy of P0 - P2.
C) mandating consumption at output level Q1.
D) leaving the quantity at the initial private market-clearing quantity and price.
Correct Answer:

Verified
Correct Answer:
Verified
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