Pollution charges will be efficient if
A) the charge is just equal to the cost borne by others from the pollution.
B) the charge is greater than the cost borne by others from the pollution.
C) the charge is less than the cost borne by others from the pollution.
D) none of the above.

Question

Quizplus · Accepted Answer

Pollution charges are efficient when they are set equal to the external cost of pollution, as this internalizes the externality and leads to an optimal level of pollution reduction.

Pollution Charges Will Be Efficient If