Taxes on a producing firm's ________ are meant to force decision makers to consider the full costs of their actions.

Question

Quizplus · Accepted Answer

Taxes on a producing firm's spillovers (or negative externalities) are meant to internalize the external costs imposed on society that are not accounted for in the market price of a good or service. This encourages firms to consider the full social costs of their production decisions.

Taxes on a Producing Firm's ________ Are Meant to Force