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The market for good Q has the demand and supply curves: QD = 40-2P Qs = P-6 The marginal external cost associated with the production of good Q is: MEC = 4+0

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The market for good Q has the demand and supply curves: QD = 40-2P Qs = P-6 The marginal external cost associated with the production of good Q is: MEC = 4+0.50. The government wishes to fix the negative externality problem, and bring the economy to the socially efficient level of output. Which of the following would accomplish this desire? Introduce a subsidy equal to 6.5 Introduce a subsidy equal to 9 Introduce a tax equal to 9 Introduce a tax equal to 6.5 Do nothing, taxes or subsidies always introduce deadweight loss, so lead to socially inefficient output. O None of the above