Suppose that government officials have set an emissions tax to reduce pollution.Further suppose that,with the emissions tax,the marginal social cost of pollution exceeds the marginal social benefit of pollution.The emissions tax is:
A)too low.
B)too high.
C)optimal.
D)efficient.

Question

Quizplus · Accepted Answer

When the marginal social cost of pollution exceeds the marginal social benefit, it indicates that the emissions tax is too low to fully internalize the external costs of pollution.

Suppose That Government Officials Have Set an Emissions Tax to Reduce