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horsena [70]
3 years ago
14

Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orang

e peels impose a negative externality on the public that must be rectified by imposing a $8-per-bag tax on sellers. What is the new equilibrium price
Business
1 answer:
ruslelena [56]3 years ago
8 0

Answer:

If negative externalities pop up in a market, the equilibrium is higher than the efficient output.

Thus when it comes to the government rectification regarding the side effects of that commercial , activity, if the amount of bags is (1) then the new equilibrium would be: <em>p*= $17</em>

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To isolate how a change in price impacts the change in quantity demanded.

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