|Question||Many cities tax or ban plastic grocery bags. The rationale for these taxes and bans is an externalities argument: plastic bags are an eyesore, take up space in landfills, and damage fish, birds, and other wildlife.
a. In a diagram, show the efficient number of plastic bags and the equilibrium number of plastic bags in the absence of any government policies.
b. Show the efficiency loss from plastic bags in your diagram.
c. Show the tax on plastic bags that would lead to the efficient outcome.