Question

Suppose that smoking creates a negative externality. If the government imposes a per-cigarette tax equal to the per-cigarette externality, then Group of answer choices the after-tax equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked. the after-tax equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked. the after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. There is not enough information to answer the question.

Answer 1

The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.

What is the externality of smoking?

The externalities of smoking refers to the costs imposed by smoking on people other than smokers themselves, in particular through the health effects of passive smoking and the effects of smoking on health care costs and productivity.

Therefore, The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.

Learn more about externality of smoking:

brainly.com/question/17093736

#SPJ1