A Difficulty with Using a Uniform Per-Unit Tax to Address

question 55

Multiple Choice

A difficulty with using a uniform per-unit tax to address a negative externality is that

• A) the tax will reduce output.
• B) the tax will increase price.
• C) the social cost of pollution might vary across geographic regions.
• D) the social cost of pollution should not be assessed on the consumers, but should be assessed on the firms.

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