2025HSCMultiple choice

Q20

1 mark

Question

The graph shows market failure as a negative externality of production.
What is the per unit tax required to correct the market failure shown on the graph?
A. P0 − P1
B. P2 − P1
C. P2 − P3
D. P1 − P3

Try the question before revealing the answer.

Syllabus alignment

Economic Policies and ManagementEconomic Issues

Macroeconomic and microeconomic policiesEvaluate fiscal, monetary, microeconomic and labour market policies in Australia.
Growth, employment and inflationAnalyse growth, unemployment, inflation, distribution of income and environmental sustainability.

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