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Cigarette smoking imposes many incidental costs on society: secondhand smoke, the litter on the street from discarded butts, and so on

Economics

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Cigarette smoking imposes many incidental costs on society: secondhand smoke, the litter on the street from discarded butts, and so on. Therefore, the market equilibrium quantity of cigarettes is not equal to the socially optimal quantity. The following graph shows the marginal private benefit (MPB) for cigarettes, the marginal private cost (MPC) of cigarettes (the private cost of producing them), and the marginal social cost (MSC) of cigarettes, including both the marginal private cost and incidental costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Then, use the purple point (diamond symbol) to indicate the socially optimal quantity. ? + MSC MPB and MSB Free Market Output Socially Optimal Output MPC PRICE OF CIGARETTES QUANTITY OF CIGARETTES
Which of the following policies could help the government achieve the efficient outcome? Check all that apply. Offer a subsidy to consumers equal to the vertical distance between the marginal private benefit curve and the marginal social benefit curve Implement tradable pollution permits Offer a subsidy equal to the price at the efficient outcome Introduce emission taxes Offer a subsidy to producers equal to the vertical distance between the marginal private benefit curve and marginal social benefit curve