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

Graphs with window x: 0 to 14, y: 0 to 14. Start Graph, Color red

x | y |
---|---|

0 | 4 |

1 | 5 |

2 | 6 |

3 | 7 |

4 | 8 |

5 | 9 |

6 | 10 |

7 | 11 |

8 | 12 |

9 | 13 |

10 | 14 |

11 | 15 |

12 | 16 |

13 | 17 |

14 | 18 |

x | y |
---|---|

0 | 8 |

1 | 7 |

2 | 6 |

3 | 5 |

4 | 4 |

5 | 3 |

6 | 2 |

7 | 1 |

8 | 0 |

9 | -1 |

10 | -2 |

11 | -3 |

12 | -4 |

13 | -5 |

14 | -6 |

x | y |
---|---|

0 | 5 |

1 | 6 |

2 | 7 |

3 | 8 |

4 | 9 |

5 | 10 |

6 | 11 |

7 | 12 |

8 | 13 |

9 | 14 |

10 | 15 |

11 | 16 |

12 | 17 |

13 | 18 |

14 | 19 |

What is the market equilibrium quantity?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

What is the market price?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

What is the optimal (efficient) quantity?

Hint

Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172

Enter DNE for Does Not Exist, oo for Infinity

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

Hint

Box 1: Select the best answer

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

Hint

Enter DNE for Does Not Exist, oo for Infinity

As a result of this negative externality, the market

Hint

Box 1: Select the best answer