The marginal external cost associated with air pollution increases with the annual output of a pollut?ing industry.At the current competitive equilibrium level of output per year, the marginal external cost is $10 per unit of output.To achieve efficiency, a corrective
A) tax of $10 per unit of output is required.
B) tax of more than $10 per unit of output is required.
C) tax of less than $10 per unit of output is required.
D) subsidy of $10 per unit of output is required.
Correct Answer:
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