In the Presence of an External Benefit, a Pigouvian ______

question 190

Multiple Choice

In the presence of an external benefit, a Pigouvian ______ that is set equal to the ______ the market output to its efficient level.

• A) subsidy; external benefit can increase
• B) tax; external benefit can increase
• C) subsidy; private cost can increase
• D) subsidy; external benefit can decrease

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