Pigovian Taxes Are Not Always Effective Because

question 109

Multiple Choice

Pigovian taxes are not always effective because:

• A)they do not directly compensate those who are affected by the externality.
• B)it is difficult to identify whether the tax should be imposed on the consumer or the producer.
• C)they are only used to benefit those who bear the externalities.
• D)None of these are reasons why Pigovian taxes are not always effective.

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