Correcting a market with an externality through taxation is _______ correcting it through the use of a quota.
A)more efficient than
B)less efficient than
C)just as efficient as
D)All of these could be true dependent on whether the tax is imposed on the buyer or seller.

Question

Quizplus · Accepted Answer

Taxation can more precisely target the externality's cost, adjusting behavior without as rigid constraints as quotas, leading to potentially more efficient outcomes.

Correcting a Market with an Externality Through Taxation Is _______