Pigovian Taxes Enhance Efficiency but the Cost of Administering Such

question 160

True/False

Pigovian taxes enhance efficiency but the cost of administering such taxes frequently exceeds the revenue they raise for the government.

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Definitions:

Quantity Effect

The change in quantity demanded or supplied of a product as a result of changes in its price.

Marginal Cost

The expense increase for generating an additional unit of a product or service.

Cartel

An association of independent businesses or countries that coordinate their actions to control the supply of a product or service, aiming to influence prices and maximize collective profit.

Marginal Cost

Marginal Cost is the cost incurred by producing one additional unit of a product.