Answer:
A. Decrease
B. $200
C. $190
D. $175
Explanation:
The noise from airplanes constitute a negative externality and hence tax was levied on airplane tickets. This is known as pigouvian tax.
Negative externality is when the benefits of economic activities to third parties is less than the costs.
If a tax is levied on a good or service, it makes the good or service more expensive and quantity demanded would fall as a result. So the demand for airplane tickets is expected to fall as a result of the impostion of tax.
The social optimal price of the ticket is the priceof the ticket after the impostion of tax. This is $200
The private market price is the price before the impostion of tax. This is $190
How much the firm receives after paying for tax = social optimal price - tax
$200 - $25 = $175
I hope my answer helps you