Graph 10-3 -Refer to Graph 10-3. the Equivalence of a Pigovian Tax

question 131

Multiple Choice

Graph 10-3

-Refer to Graph 10-3. The equivalence of a Pigovian tax and a pollution permit would require that:

• A) P^B be equivalent to the Pigovian tax
• B) Q^A be equivalent to the amount of pollution allowed by the pollution permit holders
• C) the equilibrium price and quantity of pollution be the same in both panel A and panel B
• D) all of the above conditions hold

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