A negative externality exists and government wants to impose a tax in order to bring about an efficient outcome.To accomplish its objective,government must set the tax equal to marginal

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A negative externality exists when the production or consumption of a good or service imposes a cost on a third party who is not directly involved in the transaction. To correct for this and achieve an efficient outcome, the government should set the tax equal to the marginal external cost. This aligns the private cost with the social cost, leading to a more efficient allocation of resources.

A Negative Externality Exists and Government Wants to Impose a Tax