Figure 9.9
-The pollution tax in Figure 9.9:
A)reduces equilibrium output.
B)reduces pollution associated with the production of the good.
C)raises equilibrium price.
D)all of the above

Question

Figure 9.9
-The pollution tax in Figure 9.9:
A)reduces equilibrium output. 
B)reduces pollution associated with the production of the good. 
C)raises equilibrium price. 
D)all of the above

Quizplus · Accepted Answer

A pollution tax typically reduces equilibrium output, reduces pollution by discouraging production that causes pollution, and raises the equilibrium price as producers pass some of the tax cost onto consumers.

Figure 9.9 -The Pollution Tax in Figure 9.9