Answered
Suppose that government officials have set an emissions tax to reduce pollution.Assume that the optimal tax would be $1,500,but government officials have set the tax at $500.At the equilibrium with the $500 tax:
A) there will be too much pollution.
B) the marginal social cost of pollution will be less than $500.
C) the marginal social benefit of pollution will be less than $500.
D) the marginal social benefit of pollution will be more than $500.
On Jun 09, 2024