Refer to Figure 16.1. To force this firm to produce the efficient level of output, the government should impose a tax of

A) $5.00 per bag of fertilizer.
B) $10.00 per bag of fertilizer.
C) $15.00 per bag of fertilizer.
D) an amount that is indeterminate from this information.

Efficient Level

The efficient level refers to the optimal point of production or service provision where the cost of resources is minimized and the satisfaction or benefit to consumers is maximized.

Impose a Tax

The act of a government or authority setting a financial charge or levy upon a taxpayer.