When a negative externality is present in a market,when a tax is imposed,it is:
A) inefficient, because the net benefit of buying another unit is zero for all market participants.
B) efficient, because the net benefit of buying another unit is zero for all market participants.
C) efficient, because the government mandates the efficient quantity without regard for net benefits.
D) inefficient, because the government mandates the efficient quantity without regard for net benefits.

Question

Quizplus · Accepted Answer

A tax can internalize a negative externality, aligning private costs with social costs, leading to an efficient market outcome where the net benefit of buying another unit is zero.

When a Negative Externality Is Present in a Market,when a Tax