Under an emission tax, polluters ________ what price they have to pay to pollute, __________________________ how much pollution will be generated.

Question

Quizplus · Accepted Answer

Under an emission tax, polluters know the price they have to pay per unit of pollution (because the tax rate is set by the government), but the government does not know exactly how much pollution will be generated, as this depends on the polluters' responses to the tax.

Under an Emission Tax, Polluters ________ What Price They Have