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Suppose that there is a negative externality in the market for soda. The graph below shows the supply and demand curves for soda.

What is the market equilibrium quantity?

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What is the market price?

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What is the optimal (efficient) quantity?

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What should the government do in order to ensure the market produces the optimal (efficient) quantity?

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How big should the government's corrective taxes or subsidies be in this case?

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As a result of this negative externality, the market

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