Suppose that electricity producers create a negative externality equal to $5 per unit. further suppose that the government imposes a $5 per-unit tax on the producers. what is the relationship between the after-tax equilibrium quantity and the socially optimal quantity of electricity to be produced?
a. they are equal.
b. the after-tax equilibrium quantity is greater than the socially optimal quantity.
c. the after-tax equilibrium quantity is less than the socially optimal quantity.
d. there is not enough information to answer the question.
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