No SPAM!! ONLY answer full STEP by STEP solution BY HAND . Why option C is true? Costs, Benefits € MNPB МЕС Таx t Qp Output To internalize the external cost, the authorities have established pollution...


No SPAM!! ONLY answer full STEP by STEP<br>solution BY HAND . Why option C is true?<br>Costs,<br>Benefits €<br>MNPB<br>МЕС<br>Таx t<br>Qp<br>Output<br>To internalize the external cost, the authorities have established pollution Tax 1 (per unit of<br>pollution). Which one of the following statements is true?<br>a. Tax t is the Pigouvian pollution tax (as per this Figure).<br>b. Tax t has been set too low and as a result leads to under-production.<br>Tax t has been set too low and leads to over-production with marginal external cost d,<br>that is higher than the optimum level.<br>d. Tax t has been set too high and is leading to over-production with marginal external<br>cost d, that is higher than the optimum level.<br>Why option C is true?<br>

Extracted text: No SPAM!! ONLY answer full STEP by STEP solution BY HAND . Why option C is true? Costs, Benefits € MNPB МЕС Таx t Qp Output To internalize the external cost, the authorities have established pollution Tax 1 (per unit of pollution). Which one of the following statements is true? a. Tax t is the Pigouvian pollution tax (as per this Figure). b. Tax t has been set too low and as a result leads to under-production. Tax t has been set too low and leads to over-production with marginal external cost d, that is higher than the optimum level. d. Tax t has been set too high and is leading to over-production with marginal external cost d, that is higher than the optimum level. Why option C is true?

Jun 08, 2022
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