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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.

What is the market equilibrium quantity?

What is the market price?

What is the optimal (efficient) quantity?

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

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

As a result of this negative externality, the market




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