A Pigovian tax is intended to:
A)counter the effect of a negative externality.
B)decrease efficiency in a market.
C)decrease total surplus in a market.
D)All of these are true.

Question

Quizplus · Accepted Answer

A Pigovian tax is designed to counter the effect of a negative externality by making the producer or consumer pay for the external costs they impose on society, thereby aligning private costs with social costs and improving market efficiency.

A Pigovian Tax Is Intended To