Suppose That Smoking Creates a Negative Externality

Multiple Choice

Suppose that smoking creates a negative externality.If the government imposes a per-cigarette tax equal to the per-cigarette externality,then

A) the equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked.
B) the equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked.
C) the equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked.
D) There is not enough information to answer the question.