Battery creates a negative externality of $3 each. A city has a demand for batteries given by :P=200-0.003Q.
The supply of batteries is perfectly elastic at $50.
Please answer with a graph: What is the social optimal level of batteries? If there is a tax on batteries, what will it be?
P.S. does the supply of batteries is perfectly elastic at $50 means the supply curve is a horizontal line at $50?