Consider a Competitive Market with a MPB = 22 -

Multiple Choice

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market, the government can achieve the efficient level of output by:

A) Implementing a per-unit tax of $4 on suppliers.
B) Implementing a per-unit tax of $6 on suppliers.
C) Implementing a per-unit tax of $8 on suppliers.
D) Implementing a per-unit tax of $10 on suppliers.
E) None of the above.