
Consider Figure 9.8, which depicts the supply and demand for coal. Assume coal production creates external costs. If the government imposes a pollution tax on coal production, the:
A. supply curve of coal would shift to the left.
B. supply curve of coal would shift to the right.
C. demand curve for coal would shift to the left.
D. demand and supply curves for coal would shift to the left.
Answer: A
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