What are corrective taxes enacted to do
A)give inventors exclusive rights to their inventions
B)correct for the effects of negative externalities
C)discourage production of undesirable products
D)adjust markets with positive externalities

Question

Quizplus · Accepted Answer

Corrective taxes, also known as Pigouvian taxes, are enacted to correct for the negative externalities (costs imposed on society) that result from the production or consumption of certain goods. By placing a tax on the production or consumption of the good, the goal is to internalize the external costs and make the producers or consumers pay for them. This creates an incentive for them to reduce their consumption or production of the good, thus reducing the negative externalities. The other options (A, C, and D) are not related to the purpose of corrective taxes.

What Are Corrective Taxes Enacted to Do