Policymakers who wish to discourage businesses that pollute by taxing them:

Question

Quizplus · Accepted Answer

Policymakers who wish to discourage businesses that pollute by taxing them should place a tax on producers instead in order to increase the burden on sellers. Although some of the tax burden may be shared by consumers, the intention is to incentivize producers to reduce their pollution output, and this can be effectively achieved by levying a tax on them. Placing a tax on consumers, as in choice B, would ultimately discourage consumption and hurt the economy. Choice A is incorrect because it assumes that businesses can easily pass on the entire tax burden to consumers, which is not always the case.

Policymakers Who Wish to Discourage Businesses That Pollute by Taxing