-Refer to the Figure Above

Multiple Choice

-Refer to the figure above. Assume the production of the product imposes a cost on society of R70.00 per unit. If the free market equilibrium output is 50 units, the government should

A) impose a tax of R25.00 per unit.
B) reduce the output of the firm by approximately 39 units.
C) impose a lump-sum tax of R3 500 per period.
D) impose a tax of R70.00 per unit.