16. Suppose that there is a global market of X. In the country T, the producers for X are price-takers, and
there is no domestic consumers; they export all X they produce. The international price for X is $50
per unit. The private total cost function for a firm in T to produce X is 400+0.01Q, where Q is the
units of X the firm produces. Recently, the government finds that producing X also causes external
costs, which are around $10 per unit. Which policy below can correct this market failure, and achieve
the social optimum in the country T?
(A) The government can impose a per-unit tax of $5 on producers in T.
(B) The government can request each producer in T to reduce their production by 500 units.
(C) The government can set 1000 units as an upper bound on the production of each producer.
(D) The government can request each producer to export at least 500 units.