A tax used to internalize an externality is called a:

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A Pigouvian tax is specifically designed to internalize an externality, which is a cost or benefit of a transaction that is not reflected in the market price. The tax is set equal to the social marginal cost of the externality, which encourages producers and consumers to take the externality into account when making decisions. The other options (sales tax, resource tax, privatization tax) do not necessarily address externalities.

A Tax Used to Internalize an Externality Is Called A