The Following Questions Refer to the Graph Below

Multiple Choice

The Following Questions Refer to the graph below.
-Assume that the current market demand and supply curves for Z are D₂ and S₂.If there are positive social spillovers associated with the production of Z:

A) Government should levy a per unit tax on Z to shift the supply curve toward S₁
B) An output greater than 0G would improve resource allocation
C) Government should levy a per unit tax on Z to shift the demand curve toward D₁
D) An output smaller than 0G would improve resource allocation
E) Both (a) and (d)