Use the following information to answer the next FOUR questions: The markets below show conditions in a perfectly competitive market in which there is some sort of externality Market A Market B S-MSC MSC MSB DEMSB D Quantity Quantity Market Market D S-MSC MSC 1 MSB D DEM58 Quantity Quantity 17

17. As MSC>supply, so producers need to increase supply to meet the socially optimal level. A corrective subsidy to producer would increase supply, leads to efficient level of output in market A. The given statement is TRUE.

18. As MSB>demand, consumers need to increase their demand which will possible after getting subsidy. A corrective subsidy to consumers leads to efficient level of output in market B. The given statement is FALSE.

19. As MSB<Demand, a corrective tax on consumers leads to efficient level of output in market C. After tax on consumers demand will decrease. The given statement is FALSE.

20. As MSC< supply, a corrective tax on producer help to decrease supply, that leads to efficient level of output in market D. The given statement is TRUE.