Which of the Following Statements Is Most Correct

question 106

Multiple Choice

Which of the following statements is most correct?

• A)Pigovian taxes are often preferred over direct regulation because they typically reduce externalities at a lower cost
• B)Pigovian taxes are less preferred than direct regulation because they typically reduce externalities at a higher cost
• C)Pigovian taxes are often preferred over direct regulation because they typically reduce externalities at a faster rate
• D)Pigovian taxes are less preferred than direct regulation because they typically reduce externalities at a slower rate

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Definitions:

Cost

The value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore.

Composite Units

A measurement or costing method that combines different elements or articles to determine a standard unit rate or cost.

Sales Mix

The proportion of different products or services that a company sells, reflecting the variety and quantities sold.

Fixed Costs

Expenses that do not change in proportion to the level of activity or production, such as rent, salaries, and insurance premiums.