A government decision to impose a tax on the sale of plastic disposable water bottles is an example of

Question

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Imposing a tax on plastic disposable water bottles is an example of internalizing the externality. It is a policy action meant to address the negative externality created by the production and consumption of plastic water bottles. The tax is used to make consumers pay for the environmental costs associated with producing and disposing of the bottles, which is a way of internalizing the externality.

A Government Decision to Impose a Tax on the Sale