Final answer:
After accounting for the negative externality of pollution, the supply curve shifts upwards, resulting in a new social optimum with a higher price and lower quantity of production compared to the original market equilibrium.
Step-by-step explanation:
To account for the social costs from a negative externality, the supply curve will indeed shift to the left or upwards. This reflects the higher costs of production that account for the externalities (like pollution). The new social optimum is where this new adjusted supply curve intersects with the demand curve.
Looking at the information provided, before accounting for the social cost of pollution, the equilibrium was at a price of $15 and a quantity of 440. But after considering the external cost of pollution, production becomes more expensive, causing a shift in the supply curve. As a result, the new equilibrium is at a higher price of $30 and a lower quantity of 410. Therefore, including the external costs of pollution leads to a new equilibrium with a higher price and a lower quantity of goods produced.
In summary, when the new supply curve that includes the social costs from pollution crosses the demand curve, the price at the social optimum is higher and the output at the new social optimum is lower.