(Solved): Consider the following supply-and-demand schedule for steel: Pollution from steel production is es ...

Consider the following supply-and-demand schedule for steel: Pollution from steel production is estimated to create an external cost of $$\$60$$ per ton. a) Using a supply-and-demand graph to support your answer, what is the unregulated market equilibrium (price and quantity) in the steel market? b) Add the external costs to your graph from part (a). What is the socially optimal outcome in the steel market (price and quantity)? What economic policy could be implemented to achieve the social optimum? c) Using either your previous graph or creating a new one, use welfare analysis to demonstrate that total social welfare is greater at the social optimum than with the unregulated market outcome. You don't need to calculate numerical welfare values; just identify areas as done in class.