Options for Abating Gasoline Pollution. Your production of gasoline generates a negative externality to the society. Suppose an unregulated market leads to an equilibrium price of $4 per gallon and a...

Options for Abating Gasoline Pollution. Your production of gasoline generates a negative externality to the society. Suppose an unregulated market leads to an equilibrium price of $4 per gallon and a quantity of 150 million gallons. If the market is regulated by imposing a constant pollution tax of $0.72 per gallon, the new equilibrium price is $4.40 and quantity is 142 million gallons. Consumers pay $0.32 of the tax and you pay the remaining $0.40. They are willing to pay a