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hi folks you have an exam question youamp;#39;ve got an essay to do and itamp;#39;s about indirect tax to solve negative exciting production market failure how do you draw this diagram well we start with labeling the Xamp;#39;s itamp;#39;s a market failure based diagram so itamp;#39;s price costs and benefits as always on the y-axis and just quantity is fine on the x-axis once again if you know the market that youamp;#39;re working with apply on the axis we start by drawing the negative externality in production diet lots of videos on my channel to help you with that so letamp;#39;s start with that negative exciting in production MSC is great for an NPC are you to the left of NPC so letamp;#39;s get all that drawn and labeled appropriately right so this is the diagram youamp;#39;re familiar with theyamp;#39;re the curves labeled as such Iamp;#39;m only going to label the private Optimum for now and letamp;#39;s enable that q1 and P1 private Optimum where MPC equals MPD that