Use the Following Figure to Answer the Question : Figure

Multiple Choice

Use the following figure to answer the question : Figure 20-1 : D₁ and S₁ are the private demand and supply curves,of a commodity produced by a competitive firm.S₂ reflects the social marginal cost of production,while S₀ represents the external marginal cost.
-Refer to Figure 20-1.If the government levies a tax of $28 per unit of output,then:

A) the marginal social benefit will exceed the marginal social cost and the good will be underproduced.
B) marginal social cost will exceed the marginal social benefit and the good will be underproduced.
C) marginal social benefit will exceed the marginal social cost and the good will be overproduced.
D) marginal social cost will exceed the marginal social benefit and the good will be overproduced.